“Petrol price reduction reflects response to deregulation, increased industry competition”- PETROAN PRO

PETROAN President commends NNPC, praises Dangote Refinery for stimulating downstream sector competition

Oredola Adeola

The Nigerian National Petroleum Company Limited (NNPCL) has announced a reduction in the ex-depot price of Premium Motor Spirit (petrol) from ₦1,020 to ₦899 per litre.

This move, aimed at responding to the competitive dynamics of deregulation, is expected to trigger a price war among oil marketers, ultimately benefiting consumers.

Dr. Joseph Obele, National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), disclosed this in a statement obtained by Advisors Reports on Saturday.

Advisors Reports further gathered that this development coincides with Dangote Refinery’s collaboration with MRS to sell petrol at ₦935 per litre through its retail outlets nationwide, following a reduction in the ex-depot price from ₦970 to ₦899.50 per litre.

Meanwhile, Dr. Obele stated that the price reduction by NNPCL marks a significant step in response to the competitive impact of deregulation in the downstream sector, which has heightened competition across the industry.

He emphasized that the move was a direct response to the competitive effects of deregulation, which has resulted in more intense competition within the sector.

PETROAN has commended the reduction in the ex-depot price of petrol from ₦1,020 to ₦899 per litre, praising NNPCL for answering the call for more affordable petrol prices.

The PETROAN National PRO also noted that NNPC, in a recently released document, confirmed the regional pricing scheme, with the new prices set as follows: Lagos – ₦899 litre, Warri – ₦970 litre, Oghara – ₦970 litre, Port Harcourt – ₦970 litre, and Calabar – ₦970 litre.

Expressing optimism, Dr. Obele predicted that PMS prices could fall further before the end of January 2025, driven by the global decline in crude oil prices and the recent strengthening of the naira against the dollar.

Dr. Billy Harry, National President of PETROAN, has expressed that the recent price reduction is a welcome development, one that will provide relief to motorists and Nigerians, especially during the holiday season.

“The reduction in PMS price by NNPCL is a demonstration of the company’s commitment to making petroleum products more affordable for Nigerians.

“We commend NNPCL for responding to our call for affordable PMS prices,” Dr. Harry said.

He highlighted several benefits of the price reduction for consumers, including reduced transportation costs, which will allow motorists to spend less on fuel and increase disposable income; increased economic activity, as lower fuel prices stimulate economic growth by reducing production costs and boosting demand for goods and services; and an improved standard of living, with a decrease in the cost of living, enabling Nigerians to afford basic necessities and enjoy a better quality of life.

Dr. Harry also praised Dangote Refinery for its earlier price reduction, which he believes has played a role in stimulating competition in the downstream sector.

He further referenced a report submitted by PETROAN’s technical pricing team, which analyzed the advantages and disadvantages of competitive pricing.

According to the report, competitive pricing enables companies to strategically set prices to maintain an advantage, understand their market position, attract new customers, and increase sales.

However, he stated that the report also cautioned that competitive pricing could lead to compromised product quality, urging PETROAN to call on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure compliance with quality assurance standards.