Petrol depot prices drop, pump price cuts loom

Petrol prices fell by as much as N24 per litre at major depots in Lagos on Tuesday, while other markets recorded smaller reductions, raising expectations that filling stations could begin cutting pump prices as they replenish their stocks.

The development came amid a decline in international crude oil prices, with Brent and West Texas Intermediate (WTI) falling, while the OPEC and Indian baskets recorded sharper losses.

The latest depot price intelligence also showed significant reductions in Automotive Gas Oil (AGO), otherwise known as diesel, which fell by as much as N50 per litre in Warri and N35 in Port Harcourt.

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

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

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

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.

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.

The diesel market recorded steeper declines. Matrix in Warri reduced its AGO price to N2,000 per litre from N2,050, while Masters in Port Harcourt cut its price to N1,900 from N1,935. Prudent and Rain Oil in Warri also reduced their AGO prices by N10 each to N1,940 from N1,950.

A petroleum products marketer, who pleaded anonymity, said the reductions could trigger pump-price adjustments but warned that retailers’ existing inventories would determine the pace.

“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.

“However, motorists may not see an immediate or uniform reduction. Stations still holding products purchased at higher prices may maintain existing pump prices until those stocks are depleted and replaced with cheaper supplies.”

He added that competition could accelerate the transmission of lower depot prices to consumers.

He stated further, “Where retailers begin buying at the lower depot rates, competition among filling stations could encourage downward adjustments, especially in areas where several outlets operate within close proximity.

“The extent of any reduction will also depend on transportation costs, operating expenses and retail margins. Consequently, the N20–N24 decline recorded at some Lagos depots should not be interpreted as an automatic N20–N24 reduction at the pump.”

The marketer said sustained lower energy costs could benefit the wider economy.

Meanwhile, WTI fell by $1.03, or 1.12 per cent, to $91.34 per barrel, while Brent declined by $0.29, or 0.29 per cent, to $100 per barrel. The marketer cautioned that crude oil prices, exchange rates and supply costs could still reverse the downward trend.