The competition among stakeholders in the downstream sector has caused a reduction in the price of Premium Motor Spirit, PMS, better known as petrol, as report gained.
Petrol, which sold at N1,020 per litre, dropped to N899 per litre after the Dangote Refinery in Lagos slashed the product’s price to N899.50k for marketers, last week.
Before now, petrol prices had consistently increased, causing customers to worry that the price hike might be sustained during the festive season.
Between September 16 and October 10, the Nigerian National Petroleum Company Limited, NNPCL, had raised fuel prices from N950 in Lagos and N1,019 in the North-East to N998 naira per litre, while in Abuja N1,030, making customers’ fears genuine.
But in a surprising development, the NNPCL has slashed petrol price by 12 per cent, making the product fairly affordable for customers.
This comes as the NNPCL debunked claims that the Port Harcourt Refinery had stopped operations.
Transportation costs
confirming the PMS price reduction, the National President of Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Dr Billy Gillis-Harry, said N899 per litre was for Lagos, just as Warri, Oghara, Port Harcourt and Calabar would have N970 as their ex-pot price.
Gillis-Harry said: “The reduction in PMS price by NNPCL is a demonstration of the company’s commitment to making petroleum products more affordable for Nigerians. We commend NNPCL for responding to our call for affordable PMS prices.
“The benefits of the price reduction are many including reduced transportation costs. With lower PMS prices, motorists will spend less on fuel, leading to increased disposable income.
“Lower fuel prices will stimulate economic growth by reducing production costs and increasing demand for goods and services. The price reduction will lead to a decrease in the cost of living, enabling Nigerians to afford basic necessities and enjoy a better quality of life.”
Competitive pricing
Gillis-Harry also commended Dangote Refinery for its earlier price reduction, saying it helped to stimulate competition in the downstream sector.
According to him, a report submitted by PETROAN’s technical pricing team highlighted the pros and cons of competitive pricing.
He said: “The report noted that competitive pricing allows companies to maintain an advantage by strategically setting prices. This approach helps businesses understand their market position, attract new customers, and boost sales.
“The report also warns that competitive pricing can lead to compromised product quality. Therefore, PETROAN is calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to ensure compliance with quality assurance standards.
“The Zonal leaderships of PETROAN and state Executive Councils across the 36 states of the federation have expressed optimism that the recent price reduction by NNPC will bring relief and put smiles on the faces of Nigerians at various retail outlets nationwide.
“This optimism stems from the fact that the price reduction will have a ripple effect on the economy, leading to reduced transportation costs, increased economic activity, and an improved standard of living for Nigerians.”
Monitor situation
Also speaking, Zonal chairman of PETROAN’s Eastern zone, Chief Sunny Nkpe, said as the price reduction takes effect, the orgainsation’s zonal and state executive councils would continue to monitor the situation.
According to Nkpe, this was to ensure that the benefits of the price reduction were passed on to the end-users.
On his part, National Public Relations Officer of PETROAN, Dr Joseph Obele, expressed optimism that PMS price would drop further before the end of January 2025, given the global decline in crude oil prices and the Naira’s recent gain against the dollar.
Meanwhile, President of the Dangote Industries Limited, Aliko Dangote, commended President Bola Tinubu for the positive impact of the Naira-for-crude swap deal, noting that it has led to reduction in the price of petrol.
Chief Branding and Communications Officer of Dangote Group, Anthony Chiejina, stated: “To ensure that this price reduction gets to the end consumer, we have signed a partnership with MRS to sell petrol from its retail outlets nationwide at N935 per litre. This price has already commenced in Lagos, and it will be offered nationwide starting Monday.
“The Dangote Refinery is for the benefit of Nigeria and Nigerians. We will therefore continue to work with various value chain players to deliver high-quality petrol at cheaper prices.
Adeleke Damilola (ACTION) is a versatile content writer with expertise in news writing and a seasoned media professional and broadcast specialist. Currently serving as News Editor for DNews Info, Damilola is also the CEO of the ACTION brand, committed to shaping lives and establishing a legacy of excellence for present and future generations.
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