Lower depot prices raise hopes of cheaper petrol at filling stations

LAGOS — Expectations of lower petrol pump prices have risen following reductions of up to N24 per litre in depot prices across Lagos on Tuesday.

The cuts came as international crude oil prices declined, while diesel prices also recorded significant reductions in some major markets, falling by as much as N50 per litre in Warri and N35 in Port Harcourt.

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

Dangote maintained its depot price at N1,325 per litre.

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

In Calabar, Mainland reduced its price by N7 to N1,320 from N1,327, while Alkanes cut its price by N2 to N1,325.

Warri also recorded reductions, with Keonamex cutting its price by N3 to N1,327 from N1,330 and Nepal reducing its price by N1 to N1,329.

AGO records bigger cuts

The diesel market witnessed larger price reductions than petrol.

Matrix in Warri reduced its Automotive Gas Oil, AGO, price by N50 to N2,000 per litre from N2,050. Masters in Port Harcourt also cut its price by N35 to N1,900 from N1,935.

Prudent and Rain Oil in Warri reduced their AGO prices by N10 each, from N1,950 to N1,940.

A petroleum products marketer, who spoke on condition of anonymity, said the lower depot prices could force some filling stations to review their pump prices as they replenish stocks.

“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.

He warned, however, that pump-price reductions might not occur immediately or uniformly because some retailers were still holding products purchased at higher rates.

“Stations still holding products purchased at higher prices may maintain existing pump prices until those stocks are depleted and replaced with cheaper supplies,” he said.

The marketer said increased competition among filling stations could accelerate the pass-through of lower depot prices to consumers, especially in locations with several outlets operating within close proximity.

He added that transportation costs, operating expenses and retail margins would influence the size of any eventual reduction.

“Consequently, the N20-N24 decline recorded at some Lagos depots should not be interpreted as an automatic N20-N24 reduction at the pump,” he cautioned.

According to him, sustained declines in wholesale energy prices could help lower transportation and logistics costs, offering relief to households and businesses.

He further explained that cheaper diesel could have a wider effect on the productive sector, as manufacturers, farmers, logistics operators and other businesses depend on AGO for transportation and backup power generation.

Crude prices remain a key factor

International crude oil prices also recorded declines.

WTI fell by $1.03, representing 1.12 per cent, to $91.34 per barrel, while Brent crude 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 remained important factors that could reverse the current downward movement.

For now, filling stations replenishing their stocks at the lower depot rates are under increasing pressure to review pump prices. However, the timing and size of any reductions will depend on factors including location, existing stock levels and operating costs.

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