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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has explained why recent reductions in the ex-depot price of petrol by the Dangote Refinery have yet to be fully reflected at filling stations across the country.
Speaking on a television interview on Wednesday, PETROAN President, Billy Gillis-Harry, said retail fuel prices are influenced by several factors, including product availability, acquisition costs and distribution logistics. According to him, price adjustments at the depot level do not automatically translate to immediate reductions at retail outlets.
He noted that while fuel price increases are often quickly reflected at filling stations, downward adjustments typically take longer because marketers must first recover costs incurred on existing stock purchased at higher rates. He explained that operators need sufficient margins to replenish supplies and sustain their businesses.
Gillis-Harry acknowledged that in most cases, marketers have to exhaust or significantly reduce previously acquired inventory before implementing lower prices. He added that the petroleum business also involves blending, handling costs and operational losses, which must be considered when determining pump prices.
Also speaking on the programme, energy analyst Olabode Sowunmi said fuel pricing in Nigeria is not solely determined by international crude oil prices. He explained that local supply arrangements, particularly those involving the Dangote Refinery, have reduced the direct impact of global oil market fluctuations on domestic pricing.
According to Sowunmi, the major challenge lies in the logistics chain between refineries and end-users. He said transportation, storage and distribution costs play a more significant role in determining what consumers pay at the pump than current geopolitical developments affecting global crude markets.
The analyst further noted that market behaviour among sellers can also influence how quickly price reductions are passed on to consumers. While various factors may contribute to delays, he stressed that decisions by marketers remain a key determinant in the pace of price adjustments.
The explanation comes weeks after Dangote Petroleum Refinery announced a reduction in the ex-depot prices of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO). The refinery reduced the ex-depot price of petrol to ₦1,250 per litre from ₦1,275 per litre, while diesel was cut to ₦1,700 per litre from ₦1,800 per litre.
Dangote Refinery said the price review reflects its commitment to making refined petroleum products more affordable, improving supply efficiency and supporting economic activities by easing transportation, power generation and industrial operating costs across the country.
