By Okafor Joseph Afam | January 27, 2025

Oil marketers have indicated a growing preference for imported Premium Motor Spirit (PMS) as landing costs dropped to N922.65 per litre on Friday, presenting a cheaper alternative to Dangote Petroleum Refinery’s ex-depot price of N955 per litre. This price disparity has stirred discussions within Nigeria’s energy sector, with stakeholders debating the implications for the downstream oil market.

A major marketer, speaking anonymously, stated, “The lower cost of imported petrol is often an incentive to dealers. You can’t fault marketers who see a better margin in imports.”

This shift comes despite the Dangote Petroleum Refinery’s earlier announcement that its price hike from N899.50 per litre was due to increased crude oil costs. However, the recent reduction in landing costs suggests a slight relief from global market pressures.

While importers are now sourcing petrol at a lower cost, retail prices in the Federal Capital Territory remain high, ranging from N990 to N1,010 per litre. Major depot owners such as Nipco, Sahara, and Aiteo have adjusted their prices slightly, with reductions ranging from N10 to N20 per litre, depending on location.

Rising Imports Amid Cost Adjustments

Fresh data from the Nigerian Ports Authority revealed that oil marketers imported 76.84 million litres of petrol between January 21 and January 22, 2025. Two vessels carrying a combined 57,301 metric tonnes of PMS berthed at Lagos ports, managed by Tera Shipping Limited and Peak Shipping Agency Nigeria Limited.

Depot prices in various locations reflect the changes, with Port Harcourt closing at N981 per litre, a N24 reduction. Depots in Delta and Calabar maintained prices between N972 and N990 per litre.

Stakeholders Raise Concerns

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, expressed surprise at the recent imports. He highlighted an agreement among stakeholders to halt petrol imports for 180 days to allow the Dangote refinery to establish its production capacity.

Gillis-Harry remarked, “I am surprised to hear about the imported fuel. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was supposed to stop issuing import licenses to support Dangote’s operations.”

Despite these concerns, private depot owners and independent marketers view the reduced landing costs as a chance to boost profitability. With Brent crude priced at $78.29 per barrel and the naira trading at N1,550 to the dollar, exchange rate stability and freight costs remain critical factors influencing market dynamics.

Implications for the Market

The debate over importing petrol versus supporting local refining underscores the challenges Nigeria faces in balancing energy security and economic efficiency. While marketers may prioritize cost-effective imports, the government and regulators will need to align policies to support the domestic refining sector.

As the situation evolves, it remains to be seen whether imported fuel will dominate the market or if Dangote Petroleum Refinery can regain its competitive edge. For now, oil marketers are capitalizing on the price difference to meet consumer demand and secure profitability in a volatile market.