The Dangote Refinery has announced a reduction in the prices of Premium Motor Spirit (PMS), commonly known as petrol, and Automotive Gas Oil (AGO), or diesel, across Nigeria.
The 700,000-barrel-per-day refinery reduced its petrol gantry price on Wednesday from N1,215 to N1,165 per litre.
The refinery also lowered the price of diesel from N1,650 to N1,570 per litre.
The latest adjustment represents a N50 reduction per litre for petrol and an N80 reduction per litre for diesel.
The reduction could trigger further cuts in the retail prices of petroleum products at filling stations across the country, depending on how marketers respond to the lower ex-depot prices.
The development comes amid expectations of further reductions in the cost of petroleum products as the landing cost of imported fuel continues to ease.
Earlier, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said Nigerians could see additional reductions in pump prices if the downward trend in landing costs persists.
The latest price adjustment by Dangote Refinery is therefore expected to increase competition in the downstream petroleum market and provide some relief to consumers and businesses that rely heavily on petrol and diesel.
The refinery, located in Lagos, has continued to play a major role in Nigeria’s drive to increase domestic refining capacity and reduce dependence on imported petroleum products.
BACKSTORY:
The latest price reduction comes as Nigeria’s downstream petroleum market continues to adjust to changing crude oil and petroleum product prices. Since the removal of fuel subsidy, pump prices have been largely influenced by market forces, crude oil prices, exchange rates and the cost of importing petroleum products.
The Dangote Refinery has increasingly become a major supplier of refined petroleum products to the Nigerian market as the country seeks to expand domestic refining capacity and reduce reliance on imported fuel.
Its latest decision to lower the gantry prices of petrol and diesel could put pressure on marketers to reduce their own selling prices, particularly if the lower wholesale costs are sustained.
The development also follows earlier comments from petroleum marketers that falling landing costs could create room for further reductions in fuel prices. If the trend continues, consumers and businesses could benefit from lower transportation, production and operating costs.
