The landing cost of imported premium motor spirit (petrol) has remained stuck at rates above the Dangote refinery’s ex-depot price of N699 per litre.
According to reports by the Major Energies Marketers Association of Nigeria, while the Dangote refinery’s ex-depot price has remained at N699 since December, the landing cost has been fluctuating between N780 and N750, intensifying the price war for importers.
In its bulletin on Wednesday, MEMAN disclosed that the landing cost dropped to N754.96 from N758 last week. The association noted that Dangote’s gantry price was still N699 per litre, representing a difference of about N44.
As a result, many importers are finding it difficult to sell petrol at competitive prices compared with the Dangote-backed MRS filling stations.
When Aliko Dangote slashed the petrol gantry price by N129 in December, he said the move was to ensure Nigerians bought petrol at prices not above N740 during the Yuletide. He added that it was also intended to discourage importation.
“We are going to use whatever resources we have to make sure that we crash the price down. For December and January, we don’t want people to sell petrol for more than N740 nationwide. Those who want to keep the price high to sabotage the government, we will fight as much as we can to make sure that these prices are down. If you have money to come and buy, you can pick up petrol at N699,” Dangote said during a media briefing last month.
But the move came at a loss to both the refiner and importers.
While marketers said they were losing money due to the price crash, Dangote replied that he was also losing money.
He insisted that the refinery was losing heavily each time it reduced prices, disclosing that it lost about N60bn in November alone after cutting gantry prices by N49.
“For the marketers, I pray, and I wish they would even lose more because I’m not printing money. I’m also losing money; it’s not that I’m making money,” Dangote said.
He added, “They want imports to continue. I don’t think it is right. They want to continue to dump imported petrol, so I must have a strategy of how to survive because $20bn of investment is too big to fail. We are in a situation where we will continue to play cat and mouse, and at the end of the day, somebody will give up. It is either we give up, or they will give up, and I don’t think I will give up.”
Our correspondent reports that the price war in the petroleum sector deepened over the weekend, with filling stations dropping prices below N739 per litre.
The PUNCH reports that since the Dangote refinery slashed petrol pump prices from about N900 to N739 in December, importers and depot owners have lamented mounting losses. To remain competitive, operators were forced to sell petrol at rates below their costs.
During a survey over the weekend, our correspondent observed that some filling stations now sell PMS cheaper than MRS Oil, the main partner endorsed by the Dangote refinery to champion the price reduction to N739 per litre.
As of Sunday, NIPCO sold PMS at N738 per litre, SAO filling stations sold it at N735, while Akiavic offered the product at N737. An AP filling station beside an MRS outlet in Mowe, Ogun State, dropped its price to N736 per litre.
It was gathered that filling stations located in the same areas now closely monitor rivals’ pump prices to avoid being undercut in the highly competitive market. Our correspondent reports that motorists troop to stations offering the lowest prices, leaving outlets selling at higher rates struggling for customers.
Retailers supplied directly by the Dangote refinery have been able to compete with MRS. However, it was observed that some filling stations, such as Heyden, still sold petrol at N780 per litre as of Wednesday.
