By Jumoke Abubakar
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has explained why recent reductions in petrol prices at the depot level have yet to reflect at filling stations nationwide.
Speaking o during an interview on Wednesday, PETROAN President Billy Gillis-Harry said retail fuel prices depend on several factors, including supply availability, operating costs and distribution logistics.
According to him, while consumers often expect immediate price reductions following a cut in depot prices, marketers must first manage existing stock and secure resources needed for replenishment.
“Prices are influenced by availability, cost and the process of delivering petroleum products to consumers,” he said.
Gillis-Harry explained that fuel price increases are usually implemented quickly because marketers need additional funds to restock products at higher costs.
He added that price reductions often take longer to reach consumers because existing inventories purchased at previous rates must be managed before lower prices can be reflected at retail outlets.
“That is generally the principle, although petroleum operations involve product mixtures and certain losses that must be considered,” he said.
Energy analyst Olabode Sowunmi also highlighted the complexities of fuel pricing in Nigeria, noting that global crude oil prices do not always directly determine local pump prices.
He explained that local supply arrangements, including crude allocation agreements denominated in naira, can reduce the impact of international market fluctuations on domestic fuel prices.
According to Sowunmi, the major factors affecting prices paid by consumers are often linked to logistics and distribution costs within Nigeria rather than global geopolitical developments.
“Our cost challenges largely come from the logistics chain between the refinery and the final consumer,” he said.
The comments follow a recent reduction in ex-depot prices by Dangote Petroleum Refinery.
The refinery cut the ex-depot price of Premium Motor Spirit (PMS), also known as petrol, to ₦1,250 per litre from ₦1,275 per litre.
It also reduced the price of Automotive Gas Oil (AGO), or diesel, to ₦1,700 per litre from ₦1,800 per litre.
Dangote Refinery said the adjustment forms part of efforts to improve supply efficiency, strengthen domestic refining and provide cost relief to businesses and consumers.
Industry stakeholders, however, maintain that the benefits of lower depot prices may take time to reach motorists as marketers adjust inventories and manage distribution costs.
