Dangote credits market forces with his fuel price cut that triggered a price war in oil industry downstream sector
By Jeph Ajobaju, Chief Copy Editor
Aliko Dangote has attributed the reason for the reduction in the price fuel produced in his eponymous refinery to market forces, a gambit that triggered price cuts by other market players – the Nigerian National Petroleum Company (NNPC) and Independent Petroleum Marketers Association of Nigeria (IPMAN).
Africa’s richest man explained on an Arise TV documentary posted on YouTube that the move is to protect the interests of Dangote Refinery and its investments.
“The price reduction is a response to the markets. Just put it that way. It is a refinery where we invested over $20 billion, and I think we have to try and protect our interests and also our investments.”
Dangote Refinery on December 19 slashed its ex-depot petrol price to N899.50 per litre from N970, in partnership with MRS which decided to reduce pump price to N935 per litre at its filling stations.
In reaction, the NNPCL dipped its ex-depot price to N899 per litre and retail price N965.
IPMAN also promised to lower fuel pump price to N935 per litre at its members’ filling stations nationwide from December 23.
Before the price war, consumers were buying fuel at between N935 and N1,100 per litre at most filling stations, depending on location.
PMAN guarantees enough fuel supply, urges consumers to avoid panic buying
Private fuel marketers have given an assurance of having enough stock for sale throughout the festive season and beyond, and urged motorists and other consumers to avoid panic buying that may distort the market and skew up price, besides causing tragedy.
IPMAN Publicity Secretary Ukadike Chinedu made the plea, and commended Dangote Refinery for reducing its ex-depot price to N899.50 per litre to help mitigate economic hardship.
He said the slash would reduce transport cost across the yuletide holidays.
“You see, that is the beauty of deregulation. Prices are determined by market forces. With the Dangote and federal government refineries by the corner, this will bring competitive prices,” Chinedu enthused.
He urged all IPMAN members to adjust their pump to the new template to attract more customers.
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