Dangote returns to naira petrol sales, raising prices

Fresh pressure emerged in Nigeria’s downstream petroleum market as Dangote Petroleum Refinery on Wednesday resumed gantry loading of Premium Motor Spirit (PMS) in naira after a week-long suspension.

The company however increased the ex-depo price by N140 to N1,215 per litre, a move that is expected to trigger other adjustments in petrol pump prices across the country.

The increase is a 13.02% jump from the previous N1,075 per liter, coming barely a week after the refinery stopped truck loading and temporarily switched to dollar-denominated sales, a decision that disrupted supply, prompted marketers to turn to private depots and pushed the ex-depo price above N1,300 per liter.

Dangote Refinery in its notice to its customers announced that gantry loading has resumed based on the revised naira pricing template, with all outstanding truck loading volumes to be repriced at N1,215 per liter with immediate effect.
The refinery increased the gantry price from N1,075 per liter to N1,215 per liter, representing an increase of N140 per liter.

The notice informed customers that revised gantry and shore prices would take effect immediately, and added that all dismantled gantry volumes would be repriced at the new rates.

While the return of transactions to the naira is expected to reduce supply constraints, the new ex-depot prices are expected to trickle down through the distribution chain, and marketers will likely pass on additional costs to consumers through retail prices.

The refinery had resumed coastal loading a day earlier, increasing coastal PMS prices to $1,161.23 per metric ton from $1,044.62/MT, an increase of 11.2 percent.

This latest development effectively ends the uncertainty created by the refinery’s short dollar pricing regime. However, it also signals that motorists may not be spared from another increase in fueling stations as marketers begin to factor new loading costs, transportation costs and operating margins into retail prices.

Last week, the refinery halted shore and gantry loading after introducing dollar-denominated pricing patterns, citing difficulties in procuring sufficient crude oil under the naira-to-crude oil arrangement set by the Federal Government.

This suspension tightened product availability in the downstream sector and forced marketers to source supplies from private depots, where prices at ex-depots rose by about N200 per liter to about N1,275, reflecting increased replacement costs.