The era of importation of premium motor spirit, PMS, into Nigeria may be coming to and end following a fresh cut in the ex-depot price of the product by the Dangote Petroleum Refinery, which slashed its gantry price by 49 per litre last Friday.

On Monday, major and retail marketers, in separate interviews, admitted that the latest price adjustment has significantly altered the dynamics of fuel supply and competition in the downstream market.

The latest price cut also comes amid the Federal Government’s 15 per cent import tariff on refined fuel, a policy that is expected to further widen the price gap between imported petrol and locally refined products, in favour of the latter.

Industry operators said the move could make petrol imports increasingly unviable, as marketers would struggle to match Dangote’s lower prices and remain profitable.

However, some marketers cautioned that importation remains a vital part of Nigeria’s fuel supply chain, warning that any attempt to halt imports could trigger product shortages across the country.

Last week, the latest price data from Petroleumprice.ng showed that Dangote Refinery reduced its gantry price of Premium Motor Spirit (petrol) by N49 per litre.

The refinery now sells petrol at N828 per litre, down from N877, representing a 5.6 per cent decrease, marking the refinery’s second major adjustment in three months as it responds to market realities and efforts to stabilise domestic supply.

Reacting to this, the Executive Secretary of the Major Oil Marketers Association of Nigeria, Clement Isong, said the latest pricing by Dangote Petroleum Refinery could make fuel imports unviable in the short term.

“It would stop imports now, definitely, since imports are higher than Dangote’s price. That is the logical thing, isn’t it?” Isong said.

He noted that Dangote, like any private refiner, has the discretion to price its products as it sees fit, often referencing import parity pricing, the cost of bringing fuel into Nigeria from abroad.

He explained that import parity is not a fixed price but a range, noting that the cost of bringing petrol into the country varies depending on the source.

“Dangote, barring any regulatory intervention by the authority, can price his product any way he wants. And that’s what he has been doing. He has his reasons for pricing it the way he does, probably for market reasons. But under normal circumstances, it is not unusual that he will have an eye on import parity prices. Import parity means the cost at which products are brought into the country. Now, import parity is not one price. Import parity is a range of prices. So first of all, whether I am buying from Northwestern Europe or I am buying from offshore Togo, gives me different prices. And I can have different prices from those two markets on the same day.

“What we do is for references; you use either Argus pricing or S&P pricing to give you an idea of what the price is. But when you go to the market, you might buy something more expensive or cheaper. Now, if you, depending on the volume that you are bringing in, can get significant reductions, discounts, or premiums. If I bring it into a facility that has a sizable draft. Draft means you can take a big vessel. And then the tanks inside are also big. I can benefit significantly from lower prices related to freight costs.

“Similarly, if I take it in smaller parcels to smaller facilities where the draft is not so deep and where the central tank is not so big, I can be buying it at a higher price. What we call in the business a premium. So, what we publish, we try to explain. These are the assumptions. People can also bring it in cheaper, or people can bring it in more expensive. People who are going to Pinnacle, for instance.”