BREAKING: Experts Explain Why Petrol Prices Are Dropping as NNPC Releases New List

There is intense competition in the downstream petroleum industry between the mega Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC), which runs Nigeria’s refineries.

On Thursday, December 19, 2024, Dangote refinery announced a new petrol price, crashing the cost from N970 per litre to N899, a competitive price reverberating across the industry.

Dangote explains the reason for the price crash

The refinery’s management explained that the price cut is meant to cushion the burden of Nigerians travelling for the Yuletide.

Nigerians hailed the move as thoughtful and patriotic. The country is severely impacted by high inflation, caused mainly by high transportation costs.

They say high petrol prices are to blame for the high transport costs, which translated to high inflation.

Not long after Dangote’s price crash, the NNPC slashed its ex-depot price to N899 per litre, the same as Dangote’s, sparking heavy competition in the industry.

NNPC releases new petrol price list

The NNPC lowered prices from N1,020 per litre to N899 in Lagos, N970 in Warri, Delta State, N970 in Port Harcourt, and N970 per litre in Calabar.

According to reports, Billy Gillis-Harry, the national president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), revealed that the NNPC’s PMS price reduction shows the company’s commitment to making petroleum products available to Nigerians.

He stated that the price crash had many benefits, including reduced transport costs and increased disposable income.

“Lower fuel prices will stimulate economic growth by reducing production costs and increasing demand for goods and services. The price reduction will decrease the cost of living, enabling Nigerians to afford necessities and enjoy a better quality of life,” he said.

Experts explain why petrol prices are dropping

However, energy policy experts have attributed the crash in petroleum product prices to the reduction in crude oil prices.

On Wednesday, December 18, 2024, Brent Crude reportedly sold at $70 per barrel, down from $71, and is projected to fall further.

An energy analyst, Adeola Yusuf, said the reduction in international crude oil prices is the reason for the crash in domestic petrol prices.

“We are seeing a drop in international crude price, and this is translating to a crash in petrol prices, not just in Nigeria but in other oil-producing countries,” he said.

Petrol landing cost drops to N970 per litre

Legit earlier reported that the Major Energy Marketers Association of Nigeria (MEMAN) has said the petrol landing cost has fallen significantly to N970 per litre.

The price dropped from N791 in November to N970 in December this year, MEMAN said.

The development follows a drop in crude oil prices to $73.77 per barrel on Wednesday, December 18, 2024, from $74 per barrel last week.