The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) says recent reductions in ex-depot petrol prices have not yet translated into lower pump prices because several market and operational factors influence retail pricing across the country.
Speaking during an appearance on Channels Television’s “The Morning Brief,” PETROAN leadership explained that fuel pricing is not determined by a single factor but by a combination of supply availability, distribution costs, and logistics involved in moving products from depots to retail outlets.
The association noted that even when ex-depot prices are reduced, filling stations may continue selling at previous rates until existing stock purchased at higher prices is fully cleared. This, according to PETROAN, is a standard practice in the downstream petroleum market, where operators must recover costs before adjusting retail prices.
Industry stakeholders also pointed out that price changes in the fuel market tend to be faster when costs are rising, as marketers quickly adjust to restock at higher rates. However, reductions often take longer to reflect because of inventory already bought at earlier prices and the financial risks involved in absorbing losses.
An energy analyst featured in the discussion added that Nigeria’s pricing system is shaped more by local supply chains and logistics than by global crude oil movements. He explained that arrangements involving domestic refineries, including crude supply agreements tied to local currency pricing, reduce the direct impact of international oil price shifts on pump prices.
The analyst further stressed that the final pump price is largely influenced by transportation, distribution efficiency, and decisions made by market players between refineries and end users.
The clarification comes shortly after the Dangote Petroleum Refinery & Petrochemicals reduced its ex-depot prices for petrol and diesel, a move it said was aimed at improving affordability and supporting economic activity. The refinery adjusted petrol prices downward from ₦1,275 to ₦1,250 per litre, while diesel also saw a reduction.
Despite the price cuts, PETROAN maintained that consumers should expect gradual changes at filling stations as the downstream market works through existing supply and cost structures.
