Marketers selling imported fuel brace for losses with old stock acquired at higher rate
By Jeph Ajobaju, Chief Copy Editor
Marketers of imported fuel are caught up in another price war with Dangote Refinery making reducing by 60 kobo at the weekend the ex-depot price of petrol, which comes less than two months after the cut last December that lowered pump prices across the board.
Dangote on Saturday reduced its ex-depot price from N950 per litre to N890 which may prompt the Nigerian National Petroleum Company Limited (NNPC) to do so, just as it happened in December.
Dangote Refinery and its distribution partners such as MRS filling have slashed retail pump price to below N940 per litre North and South.
Petroleum Products Retail Outlet Owners Association of Nigeria (PPROOAN) President Billy Gillis-Harry, speculated in a statement that NNPC may reduce its ex-depot and retail prices in response.
The NNPC currently sells at N965 per litre ex-deport and Gillis-Harry enthused it may follow Dangote step in order to remain relevant in a deregulated oil market.
“There is an evident possibility that the NNPC will reduce prices,” he said.
Marketers of imported petrol lament that the Dangote reduction comes with a negative impact on their business.
Independent Petroleum Marketers Association Nigeria (IPMAN) Vice President Hammed Fashola and spokesperson Chinedu Ukadike alerted that the latest Dangote rejig would force marketers who bought at the old price to sell at losses.
“When this happens (Dangote Refinery petrol reduction), the only option a marketer has is to bring down the price. Because if you don’t do that, the competition will set in,” he said.
Ukadike stressed that “this is why marketers fear lifting fuel because of the price scare. They will not want to suffer collateral losses.”
Some marketers believe that Dangote Refinery made the strategic move to cut its petrol price because of the lower landing cost of imported petrol.
Those who imported at N970 per litre, higher than the latest Dangote’s price of N890, will be forced to sell at losses.
“So, if you have a N950 product with you, within two to three days, you will not have an option but to bring it down due to the Dangote Refinery’s petrol price of N890 per litre.
“That is the situation marketers are facing now, but we have to cope with it. It is the marketer who bears the losses,” Fashola reiterated.
Besides, PETROAN has announced that its members have started lifting fuel and other products from the newly re-opened Port Harcourt and Warri Refineries.
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