Fuel Prices Should Be Lower: Marketers Send Strong Message to Dangote, Refiners as Crude Oil Falls

• PETROAN calls for reduced petrol prices amid declining global crude oil costs
• Consumers urged to benefit from lower fuel prices due to improved market conditions
• Concerns arise over cheaper imported fuel compared to local refinery prices

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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

Despite the recent decline in global crude oil prices, Nigerians are yet to enjoy significant relief at the fuel pumps, prompting petroleum marketers to call on refiners, depot owners and importers to slash petrol prices in line with prevailing market conditions.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged operators across the downstream oil sector, including the Dangote Refinery and petroleum importers, to ensure that the benefits of lower crude oil prices are transferred to consumers through reduced ex-depot and retail pump prices.

The association said the current market environment presents a crucial opportunity to ease the financial burden on households and businesses struggling with rising living costs.

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"Consumers deserve lower prices"

In a statement issued by its National President, Billy Gillis-Harry, PETROAN stressed that fuel pricing should mirror developments in the international oil market.

"The recent drop in global crude oil prices offers an opportunity for stakeholders in the downstream petroleum sector to pass the savings on lower crude costs to Nigerian consumers," he said.

According to him, fairness and economic relief demand that both ex-depot and retail prices adjust downward whenever market realities change.

The association maintained that Nigerians should not continue paying high prices for petrol when the cost of crude oil, the primary raw material, has eased significantly.

Falling crude prices raise fresh questions

PETROAN noted that Brent crude prices have declined to around $77 to $78 per barrel following the easing of tensions between the United States and Iran and expectations that oil shipments through the Strait of Hormuz will remain stable.

Analysts expect Brent crude to trade between $75 and $82 per barrel in the coming week, while West Texas Intermediate (WTI) is projected to hover between $72 and $79 per barrel.

The marketers attributed the decline to improved geopolitical stability, increased crude exports from the Middle East and concerns over weaker global demand.

However, they warned that renewed tensions or supply disruptions could reverse the trend and trigger another spike in oil prices.

Is imported fuel cheaper than the local supply?

One of PETROAN's biggest concerns is the growing price gap between imported and locally refined petroleum products.

Gillis-Harry described it as surprising that imported fuel appears to be landing in Nigeria at lower costs than some products supplied by domestic refiners.

"The landing cost of imported petroleum products appears to be lower than the prices offered by domestic refiners," he said.

He argued that the development underscores the need for a more competitive downstream sector where multiple players can operate freely and consumers benefit from lower prices, according to a BusinessDay report.

Call for more competition and refinery reforms

PETROAN urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to continue granting import licences to qualified marketers to prevent monopolistic practices and encourage healthy competition.

The association also called on NNPC Limited Group Chief Executive Officer, Bayo Ojulari, to engage two Chinese firms reportedly interested in operating the Port Harcourt and Warri refineries.

According to PETROAN, allowing competent private operators to manage the refineries could improve efficiency, boost local refining capacity and ultimately force fuel prices lower.

The group expressed optimism that if crude prices remain moderate, exchange rates stay stable, and refining costs decline, Nigerians could finally see more affordable petrol prices in the months ahead.

Petrol price may drop to N1,000 per litre

Legit.ng earlier reported that Fresh hope of cheaper petrol is emerging for millions of Nigerians as energy experts predict that the pump price of Premium Motor Spirit (PMS) could decline to around N1,000 per litre in the coming weeks following a sharp drop in global crude oil prices and a fresh price cut by Dangote Petroleum Refinery.

The optimism comes after Dangote Refinery announced a N75 reduction in its ex-depot petrol price, reinforcing expectations that marketers may soon lower prices across the country.

According to a BusinessDay report, the latest price cut by the refinery has intensified competition in Nigeria's downstream oil sector and strengthened projections that the era of petrol selling above N1,200 per litre may gradually fade if current market conditions persist.