KEY POINTS
- Dangote refinery cuts petrol price again, pressuring importers who struggle to match its rates.
- Marketers warn that abruptly ending imports could create fuel shortages due to limited local output.
- Import parity data shows domestic supply becoming more competitive as tariffs loom.
Nigeria’s petroleum marketers are considering stepping back from fuel importation after the Dangote Petroleum Refinery took another slice off its ex-depot price, shifting the balance of competition in the downstream market.
Major and independent marketers said the price change, announced last Friday, has sharpened the divide between costly imported petrol and cheaper domestic supply. Many believe the economics are turning rapidly against imports, even before the planned 15 per cent federal tariff on refined fuel comes into effect.
Marketers told The Punch that if the price gap continues to widen, importation would simply become unworkable. Yet they worry that pulling back too abruptly could expose the country to another round of supply shortages, as local refineries still cover only a fraction of national demand.
The latest adjustment from Dangote’s facility saw the pump-gate price of petrol fall to N828 per litre from N877. It is the second major reduction in three months, part of a push to stabilise domestic supply and assert pricing leadership in a deregulated market where volatility has become the norm.
Clement Isong, head of the Major Oil Marketers Association of Nigeria, said the new pricing has tilted the market so far that imports no longer make sense for most operators.
“It would stop imports now, definitely, since imports are higher than Dangote’s price,” he said. He added that the private refiner has the freedom to set prices based on its commercial outlook, typically guided by the cost of bringing products in from overseas.
He explained that import parity is a moving benchmark influenced by where fuel is sourced, the size of vessels used, and available storage capacity. Large parcels brought into deep-draft terminals can still land at lower cost, but most importers face higher delivery prices that leave them disadvantaged.
Market disruption raises supply risk concerns
While industry players acknowledge that Dangote’s dominance offers a clearer local benchmark, some warn that relying too heavily on one source carries risk. The president of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said imported fuel currently plugs a wide supply gap that domestic plants cannot yet fill.
“So if import stops, the chances of product unavailability will increase,” he said. He noted that despite buying from Dangote’s refinery, retailers continue to face loading delays, and output levels remain far short of what Nigeria consumes daily.
Gillis-Harry urged the federal government to revisit the planned import tariff to prevent a scenario where fuel becomes cheaper on paper but scarce in filling stations. He described the price cuts as part of normal market competition, insisting that “imports cannot stop” for now.
Meanwhile, fresh data from the Major Energies Marketers Association of Nigeria showed import parity for petrol holding around N824 per litre over the past month. Spot landing prices have edged slightly higher, leaving Dangote’s N828 per litre price almost level with the benchmark. Retail prices continue to hover between N850 and N950 depending on transport costs and geography.
Analysts say if import costs rise further when the tariff is finally enforced, the refinery’s pricing advantage may grow even stronger. But others caution that Dangote may eventually push prices back up if crude costs and exchange rates continue to climb.
For consumers, the immediate effect is a small relief on fuel spending. For the market, it marks another turning point in a transition that is forcing every player to re-calculate their survival strategy.
