Stakeholders anticipate cheaper fuel, analyst speculates price drop to N650 per litre
By Jeph Ajobaju, Chief Copy Editor
Fuel marketers and other stakeholders anticipate continued pump price reductions from the lingering tit-for-tat price cuts between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC).
Dangote Refinery, the usual catalyst, has reduced its fuel price twice within the last two months, the latest on February 26 when it announced ex-depot price reduction from N890 per litre to N825.
The NNPC reacted, as it previously did, by slashing its own pump price from N940 per litre to N860 in Lagos and N880 in Abuja and other parts of the country effective from March 3.
Both the Petroleum Retailers Outlets Owners Association of Nigeria (PROOAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) said Nigerians should expect cheaper fuel from the price war.
PROOAN President Billy Gillis-Harry told Daily Post that “the new price has been reflected on our portal. This price reduction will be a huge relief to many Nigerians struggling to make ends meet.
“The reduction in PMS prices is expected to positively impact Nigerians’ lives.
“We are engaging NNPCL to also bring down the petrol prices for the benefit of Nigerians and marketers.”
IPMAN National President Abubakar Maigadi explained that what is happening in the downstream oil and gas sector is the beauty of deregulation, and “it is not surprising because Dangote petrol is selling at that rate.
“This is what we have been telling the government to deregulate the sector. The price will start coming down. Investors have started coming.
“The reduction in petrol price means joy to Nigerians and marketers.”
Industry analyst speculates pump price may drop to N650 per litre
Paul Alaje, financial analyst and Chief Economist at SPM Professionals, said fuel price may drop to between N650 and N800 per litre if the price competition between Dangote Refinery and the NNPC continues.
He explained on Channels Television that, however, there would be risks if the price war between the two firms does not continue.
His words: “If there is more competition, because of the interest of capitalists to make a profit, eventually they will continue to reduce petrol prices if they don’t agree.
“Nigerians should be happy with their non-agreement. Once there is an agreement, they can fix prices. The truth is that you and I may have no option.
“In the beginning, when you have two major giants, Dangote and NNPCL, all of these are important. The danger is that if NNPCL fizzles out, you face a pure capitalist, and you don’t want to know the implication. If it is Dangote Refinery that stops, you are back to Egypt.
“We need to have more players in the market.
“We, in fact, want more of the competition to go on because this is the consequence of deregulation. I should be buying fuel at between N650, N750, and N800 per litre.
“But if any of them fizzles out, be ready to buy at over N1,000 per litre again.”
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