Petrol depot prices fall, pump cuts loom

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By Udeme Akpan, Energy Editor

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LAGOS — Petrol depot prices fell by as much as N24 per litre in Lagos on Tuesday, raising expectations of pump-price cuts as filling stations replenish stocks bought at the lower rates.

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The reductions, recorded across major markets, came amid a decline in international crude oil prices, while diesel prices also fell sharply, dropping by as much as N50 per litre in Warri and N35 in Port Harcourt.

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In Lagos, Ascon, Integrated and Sahara reduced their petrol prices by N24 per litre to N1,327 from N1,351. Pinnacle cut its price by N24 to N1,326 from N1,350, while MRS reduced its price by N20 to N1,332 from N1,352.

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Dangote retained its depot price at N1,325 per litre.

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In Port Harcourt, Ascon and Integrated reduced their prices by N5 each to N1,815 from N1,820, while Ibeto maintained its price at N1,815.

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In Calabar, Mainland cut its price by N7 to N1,320 from N1,327, while Alkanes reduced its price by N2 to N1,325 from N1,327.

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In Warri, Keonamex reduced its price by N3 to N1,327 from N1,330, while Nepal cut its price by N1 to N1,329 from N1,330.

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The diesel market recorded steeper reductions.

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Matrix in Warri cut its Automotive Gas Oil, AGO, price by N50 to N2,000 per litre from N2,050, while Masters in Port Harcourt reduced its price by N35 to N1,900 from N1,935.

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Prudent and Rain Oil in Warri also reduced their AGO prices by N10 each to N1,940 from N1,950.

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A petroleum products marketer, who spoke on condition of anonymity, said the reductions could trigger pump-price adjustments, particularly among retailers replenishing their stocks at the new depot rates.

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“The latest depot reductions are expected to put pressure on filling stations to review their pump prices, particularly outlets buying directly from the affected depots or replenishing their stocks at the new lower rates,” he said.

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However, he said motorists should not expect immediate or uniform reductions because some filling stations were still selling products purchased at higher prices.

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“Stations still holding products purchased at higher prices may maintain existing pump prices until those stocks are depleted and replaced with cheaper supplies,” he said.

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The marketer said competition among filling stations could accelerate the transmission of lower depot prices to consumers, particularly in areas where several outlets operate close to one another.

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He, however, noted that transportation costs, operating expenses and retail margins would determine the extent of any pump-price reduction.

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“Consequently, the N20-N24 decline recorded at some Lagos depots should not be interpreted as an automatic N20-N24 reduction at the pump,” he cautioned.

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According to him, sustained reductions in wholesale energy prices could ease transportation and logistics costs and provide relief to households and businesses.

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He added that lower diesel prices could have a wider impact on the productive sector because manufacturers, farmers, logistics operators and other businesses rely on AGO for transportation and backup power generation.

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Meanwhile, international crude oil prices also declined.

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West Texas Intermediate, WTI, fell by $1.03, or 1.12 per cent, to $91.34 per barrel, while Brent crude declined by $0.29, or 0.29 per cent, to $100 per barrel.

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The marketer, however, warned that crude oil prices, exchange rates and supply costs remained key factors that could reverse the downward trend.

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For now, filling stations buying fresh supplies at the lower depot prices face growing pressure to review their pump prices, although the timing and extent of any cuts are expected to vary according to location, stock levels and operating costs.

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