Petroleum marketers and importers in Nigeria’s downstream sector are grappling with shrinking profit margins as fragmented pricing disrupts the market, forcing many to sell petrol at rates barely covering costs.
Caught up in the price war, they are currently battling to reduce mounting losses by eyeing other markets. Despite price cuts, low-level margins have continued to compound their woes.
Central to the threat facing marketers’ investments is the fierce price war between Dangote Refinery and NNPC Limited, which has driven the price of Premium Motor Spirit (PMS), commonly known as petrol, down from N950 to N860 per litre.
According to yesterday’s (Wednesday) industry statistics computed by the Major Energy Marketers Association of Nigeria (MEMAN), the ex-depot price of petrol was N830 to N835 per litre, in comparison to the N825 per litre gantry price for Dangote Refinery.
At the moment, marketers are at a crossroads in a bid to offload old stocks, with some selling below the landing cost to recoup their investment.
