Marketers of petroleum products say filling stations still sell Premium Motor Spirit, otherwise called petrol, above N1,000 per litre because they have yet to sell out the old stock.

According to them, the old stock of PMS was bought at the rate of N970 and many still have the product in their tanks.

The PUNCH reported that on December 19, 2024, the Dangote refinery slashed the ex-depot price of its petrol from N970 to N899.50 per litre.

Similarly, the Dangote refinery announced its partnership with MRS Petrol station to sell petrol from its retail outlets nationwide at N935 per litre.

The President of Dangote Industries Limited, Aliko Dangote, clarified that the reduction in the price of PMS was primarily driven by the complex dynamics of market forces.

This generated what some called a price war in the downstream sector, forcing the Nigerian National Petroleum Company Limited to reduce its ex-depot price to N899 per litre.

Since the price cuts, NNPC retail outlets in Lagos and its environs have adjusted their pumps to N925/litre.

Similarly, some major marketers were forced to sell petrol below N1,000 a litre. Some sell at N990, N980, N950 or N935.

However, our correspondent observed that despite the price reduction, many filling stations are still selling a litre of petrol above N1,000.

In many filling stations in Lagos, Ogun and many other states, the price still goes for as high as N1,070 per litre.

Although some have effected some changes, they still sell around N1,050, N1,030, N1,010 or N1,000 per litre as of Wednesday.

The price disparity between these filling stations and those owned by major marketers has been blamed for the queues in the latter.

Speaking in an interview with our correspondent, the National Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, said the marketers were still struggling with the old stock they bought at the old price.

Fashola maintained that the reduction cannot just take effect immediately.

“Some of our members have old stocks. So, there’s no way they can just start immediately. It’s only when they go back to the market to purchase at the lower price, then they will start selling at the new price. If you look around, as of yesterday, I see many of our members have come down to N940 or N935 in Lagos. So, by next week, you will see more of them. Once they finish with their old stock, they will start selling at the reduced rate,” Fashola stated.

According to him, marketers are aware of the competition out there and no one wants to be left behind.

“You cannot deceive yourself. This is competition. This is what we have been asking for. So, if you like, put your fuel at N1,500, nobody will buy it. So, it’s not deliberate. If you are still seeing a few of us that are still selling at N1,000, it is because of the old stock. Once they finish with their old stocks, they will start selling at the lower price,” he emphasised.

When Fashola was reminded that the filling stations would not have retained the old price if the price had gone up, he replied, “Well, as a businessman, your purpose is to remain in the business. So, if you make a huge loss, you can go down. That’s just it. It is natural.”

Nonetheless, the IPMAN Vice President maintained that a lot of marketers are now making losses due to the price reduction.

“Even at that, some of us still make losses. I can tell you that some people when their stock gets to a level that they can bear the loss, they will reduce their prices. I can take myself an example. Some of my stations yesterday, when we looked at our stock, maybe we had 20,000 litres in some of our stations, we calculated our losses and I thought it was minimal. So, we reduced our prices despite being the old stock.

“That’s the truth. That’s because people are running away. That’s the reality. Many of our members are doing that too. When they calculate the loss and they can bear this loss, they fix a new price,” he stated.

While acknowledging the positive impacts of deregulation, Fashola noted that there is also a negative effect to it.

“The negative effect of deregulation is like what we are just discussing. If you buy a product at maybe, N1,000 today, and tomorrow, the price goes down to N950. You’ve already recorded a N50 loss. You buy a product today from a depot and the following day, the price goes down. Have you finished that stock? It’s not possible. That is the negative aspect of it. Therefore, you have to be careful. You have to go with information before you make your purchases, even before you make your imports.

“And there are some factors you have to consider. That is the exchange rate and the crude oil price. Those are the major factors that determine the price of petroleum products. So, you have to be futuristic. You have to be able to project very well before you make your move. Otherwise, you enter into trouble. That is one of the negative aspects of deregulation. But, we have to cope with it,” he explained.

The marketer lamented that those in the business now face financial challenges following the removal of fuel subsidies.

As the price of PMS rose from N200 to N1,000 per litre, Fashola disclosed that marketers are finding it difficult to do business, especially as the interest rate rises monthly in banks.

“When you go to the bank, you know the interest you will pay. So, which way? We need more money to remain in business–more money, but with a little margin. This is really impacting on us. But we all call for deregulation and we have to live by it. We don’t have an option,” he added.

Fashola advised marketers to get themselves prepared for the challenges ahead, the reality, and the new trend, saying “We cannot be doing our business the way we used to do it before.”

On his part, the National Publicity Secretary of the Petroleum Products Retail Outlet Owners Association of Nigeria, Joseph Obele, said no member of the association has bought fuel at the reduced rate.

“None of our members has bought at the reduced rate at the moment,” Obele said, justifying why some filling stations still sell PMS at a higher rate.

He added that there was a wide disparity between the price of PMS in Lagos and Port Harcourt or other places far from Lagos.

According to him, the NNPC sells PMS at N899 in Lagos and N970 in Port Harcourt due to logistics.

Credit: PUNCH