Strong indications emerged at the weekend that prices of “Premium Motor Spirit” (PMS), popularly called petrol, may crash further in 2025.

Industry experts, who spoke to Saturday Sun, noted that petrol, which currently sells for between N900 and N950 in many fuel stations, may have its price further crashing to as low as N500 a litre in the course of the year.

According to oil stakeholders, the likely drop in prices of petrol in 2025 is premised on a strong downstream sector propelled by the deregulation policy of the federal government.

According to industry players, other reasons for the price drop include stable foreign exchange policy, price competition, “Naira-for-crude” policy and the coming on stream of the Port Harcourt, Warri, and Dangote refineries. They also affirmed that for the refineries to sell their products in the domestic market and accept payment in naira will contribute to price fall.

The Federal Executive Council (FEC) had last July approved the sale of crude to local refineries for payment in naira.

In addition to this is the rebound of activities by modular refineries, which are now upbeat about the downstream sector and have concluded plans to add petrol refining to their stable of products in addition to diesel, which hitherto was their sole product line.

This comes as Nigeria’s current daily petrol consumption has hit approximately 40 million litres with local production. According to truck-out data from the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), Dangote Refinery contributes an average of seven million litres while NNPCL controls 1.2 million litres, bringing the total to 8.2 million litres.

Modular refineries are out of the picture as they only produce diesel for now. The country currently has about 25 licensed modular refineries but only five are in operation.

This means that only 20.5 percent of the country’s petrol need is met through local refining, while the remaining 79.5 percent or 31.8 million litres are imported.

At the moment, the Dangote Refinery is producing about 30 million litres of petrol but only injects about seven million litres into the domestic market, a figure which increased by five million litres in October, up from its initial 25 million litres.

On the contrary, the 125,000 barrels per day Warri Refining and Petrochemical Company (WRPC), which commenced operations a few days ago, is operating at 60 percent capacity with the production of Kerosene, Diesel, and Naphtha.

Prior to the commencement of operations of Warri refinery, the 60,000 barrels per day old Port Harcourt Refinery, which commenced operations over a month ago, is injecting about 1.4 million litres of petrol via blending with straight-run gasoline, 1.5 million litres of diesel and 2.1 million litres of LPFO.

According to the Group Chief Executive Officer (GCEO), NNPC Ltd, Mr. Mele Kyari, the 150,000 Port Harcourt Refinery 2 is currently undergoing rehabilitation and is at 90 percent completion stage, ditto for the Kaduna Refinery which is also undergoing rehabilitation. But a presidency source told Saturday Sun that the Kaduna Refinery may not come on stream anytime soon due to the huge cost implication and other technical reasons.

Though Kyari had recently said NNPC was no longer importing petrol, major marketers and some private depot owners were still importing about 30 million litres daily to bridge supply shortfall.

But the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Ukadike Chinedu, in a telephone interview with Saturday Sun, said the coming on stream of Port Harcourt and Warri refineries is a game changer for the downstream sector as it will promote a healthy price competition as already being witnessed.

He said both the Nigerian National Petroleum Company Ltd and Dangote have reduced prices in the last three weeks, a signal to the gains of multiple sources of production.

Besides, he said the coming on stream of the NNPC Ltd refineries in addition to Dangote’s gives petroleum marketers and consumers the option of multiple sources of products as against a monopoly market.

Ukadike was upbeat that this development will see prices of petrol drop further below N500 per litre in 2025 as more players add capacity to refining petroleum products.

Again, he said the foreign exchange policy of the Federal Government is already yielding some positive results with a dollar exchanging for less than N1,800, adding that if this trend is sustained, petroleum prices would crash further because more foreign exchange would be conserved when products are no longer imported.

He further disclosed that more modular refineries are now beginning to take steps to add petrol refining to their line of products because they are now certain of the market through improved product demand.

According to him, all these improvements being witnessed in the sector are a result of the deregulation of the downstream sector, which promotes efficiency, healthy rivalry, and price competition among players to the benefit of the consumers.

The IPMAN Publicity Secretary further pointed out that the “naira-for-crude” policy of the Federal Government is a major factor that will shape petrol prices in 2025 as it would tame inflation and reduce foreign exchange pressure.

Also speaking, the President of the Petroleum Products Retail Owners Association of Nigeria (PETROAN), Mr. Billy Harry, aligned with Ukadike.

Harry assured that the coming on stream of the Port Harcourt and Warri refineries would lead to cheaper fuel options for Nigerians.

The PETROAN President maintained that the possibility of affordable petrol for Nigerians is very feasible in 2025.

“As you can see, NNPC has reduced its ex-depot price from N1,045 per litre to N899 per litre for marketers, translating to N925 per litre at the pumps for the end users. This, I must say, is very commendable. These are not small drops, but massive drops from N1,045 to N899 ex-depot is a lot of drop.”

On the other hand, he said the Dangote refinery equally implemented a similar ex-depot price slash from N970 to N899.50 per litre. He pointed out that with the consistent availability of petroleum products, competition will set in and prices of petroleum products will drop further in the New Year.

In his submission, the Publicity Secretary of Crude Oil Refiners Association of Nigeria (CORAN), Mr. Iche Idoko, said Nigerians would gradually begin to witness the gains, which is typical of a deregulated market.

“Price drop is one of the characteristics of deregulation we had highlighted. As the industry settles in to the regime of full deregulation, we are bound to see competitions amongst players, which ultimately will benefit the consumers.”

According to him, these competitions will be around prices, product quality, and credit lines available to bulk buyers.

This, he said, are the advantages that local refining brings. As more local refineries come on stream in the coming months, the industry shall see these positive trends of refiners and suppliers wooing consumers with price reduction and all manner of incentives.

Unless there is a last-minute change in plans, marketers and retailers of petroleum products are set to begin lifting Premium Motor Spirit (“petrol”) from the Port Harcourt Refining Company this week.

The Publicity Secretary of the Petroleum Products Retail Outlet Owners Association of Nigeria, Joseph Obele, revealed this in an exclusive interview with (The Punch).

According to Obele, since the refinery resumed operations in November, it has been supplying fuel only to retail outlets owned by the Nigerian National Petroleum Company Limited (“NNPCL”).

While marketers still load fuel from the NNPCL, Obele clarified that the products marketers are currently purchasing from the state-owned oil company are imported.

He expressed concerns that the NNPCL is selling “PMS” to retailers in Port Harcourt at higher prices than those in Lagos State, urging that the refinery should sell at N899 per litre instead of N970.

“NNPC is still telling us to buy at a rate different from the rate they are selling to Lagos at the moment because of logistics. So, Port Harcourt retail outlet owners are not really comfortable with that. Hence, the Port Harcourt refinery will start servicing us this week.

“We are also requesting that the same rate NNPC is selling to our members at Lagos should be the rate they will be selling to us over here in Port Harcourt too. We are not really comfortable with that disparity,” he disclosed.

When asked if marketers in Port Harcourt and surrounding areas have started buying directly from the NNPC refinery, he replied, “No, but it will commence this week. The trucks loading out are for the NNPC retail outlets only.”

In his request to the NNPC, Obele stated, “We in Port Harcourt, we plead with the NNPC to sell to us at the same rate they are selling fuel to Lagos marketers. The difference is too much. It is N899 per litre in Lagos but N970 in Port Harcourt. It is far higher than that of Lagos.

“The way they explain it, it is like their own vessel will be bringing it and shipping it over to Port Harcourt depot for us to buy. So, we are now saying that since you will be selling directly to us from the refinery, you now have the stock available. Sell to us at the same rate you are selling to Lagos marketers.

“So, that’s where we are right now. Our request is that the NNPC should sell to us from the Port Harcourt refinery at the same rate they are selling the product to those in Lagos.”

When asked if he meant the NNPC was still importing fuel to Lagos, the PETROAN spokesman responded affirmatively, saying “The stocks in Lagos are imported stocks.”

After several delays, the NNPC announced in November that the old 60,000 barrels per day Port Harcourt refinery had resumed operations.

The NNPC also promised that rehabilitation works at the new Port Harcourt refinery, with a 150,000 barrels per day capacity, would be completed soon.

NNPC spokesman, Olufemi Soneye, confirmed that the refinery currently produces naptha, which it blends to produce petrol.

The Independent Petroleum Marketers Association of Nigeria has said that petrol is going to sell at N935 per litre beginning from Monday (today) based on the latest arrangement with the Dangote Petroleum Refinery.

IPMAN’s National President, Maigandi Garima, said the reduction in Dangote refinery’s ex-depot price for petrol and the uniform arrangement being put in place, would enable marketers to sell at N935 in their outlets nationwide, incurring a cost of N36 on logistics.

“Dangote refinery has brought another new arrangement of loading and pricing by which marketers would pay a fixed ex-depot price of N899.50k.

“The refinery is running a programme whereby it wants the fuel consumption across the country to be at the same rate. We are expecting the new arrangement to kick-start on Monday. Previously, the loading price was N970 per litre, but from Monday, petrol prices will drop to N935,” Garima stated.

The association also stated that over 30,000 of its members are set to commence petrol loading from the Dangote Petroleum Refinery and the Port Harcourt Refining Company following the reduction of the ex-depot price of the product to N899 per litre.

This came as it was observed that the pump price of petrol dropped on Sunday to between N950 and N980 per litre in a few filling stations in Lagos including MRS, BOVAS and NNPC. However, the cost was above N1,000 per litre in many other outlets in the state.

But IPMAN promised on Sunday that the price would drop further, as it said the cost of petrol would reduce to N935 per litre in more filling stations by Monday (today) in view of Dangote refinery’s new arrangement.

Similarly, retail outlet owners under the auspices of the Petroleum Products Retail Outlet Owners Association of Nigeria have begun registration with MRS filling station to lift Dangote petrol at N935 per litre.

The IPMAN National Publicity officer, Chinedu Ukadike, and the PETROAN President, Billy Gillis-Harry, disclosed these during separate interviews (with The Punch) on Sunday.

The development came after intense pricing competition in the nation’s downstream sector, which triggered a price war between NNPCL and Dangote due to a reduction in the ex-depot price to N899 per litre.

On Saturday, the NNPCL, in a surprising development, slashed petrol prices by 12 per cent, to the delight of Nigerians and marketers.

This decision, coming days after the Dangote Refinery reduced its price to N899, was confirmed by the Petroleum Products Retail Outlet Owners Association of Nigeria in a statement on Saturday.

Before now, petrol prices had consistently increased, causing customers to worry that the price hike might be sustained during the festive season.

It was earlier reported that the reduction in price to N935 in Lagos confirms projections by marketers.

Providing further updates on the preparations for product lifting, the IPMAN publicity officer stated that marketers are getting ready to start loading petrol at a reduced price, as the national oil company has updated its pricing on the purchase portal.

Ukadike also said that the competition for market share between NNPCL and Dangote is beneficial for Nigerians because, in the end, it will reveal the true cost of PMS production and the expenses incurred in logistics.

According to him, the price war is central to a deregulated oil sector.

He said, “NNPCL has changed their price at their portal. It means that everyone who has access to that portal can be able to request and pay for products. Once you pay, you will be called to the depot to pick up your products. Yes, they have changed the price on their portal.”

He continued, “For us, the reduced price remains a welcome development as that is the beauty of a deregulated sector. You know, when there are multiple sources of petroleum products, there will be production and pricing competition. That interplay of pricing has come to the centre stage, and it is now to the advantage of the commuters who wish that this petroleum product will be sold at a lesser price.

“The fight to control market share between NNPCL and Dangote is healthy for Nigerians because, at the end of the day, we would know the actual cost of PMS production and the amount spent on logistics.

“It will also help marketers in our retailing capacity and pick up more volumes. The cost today is very high, and the reduced price will help us pick more volumes. Commuters are no longer taking products the way they used to but with the price decrease, there will be heavy consumption.”

He further noted that marketers will not stick to a single supplier but patronize both refineries based on the location.

Ukadike said, “We would be picking our products from both refineries but the most important thing is the nearness to retail outlets. But Dangote arrangement is via MRS, and NNPCL is helping to load from other depots.”

Regarding a potential price reduction, the IPMAN national officer explained that marketers do not set prices; instead, the factors of demand and supply influence the price, which is why prices vary across the country.

The national officer also assured Nigerians that filling stations owned by its members will be open throughout the festive period and avoid artificial scarcity.

On his part, the PETROAN president said its members are registering with MRS filling to pick up products from its stations as the Dangote and PH refineries haven’t started product disbursement to its members.

He also stressed that a smooth product off-take starting today (Monday) will accelerate the implementation of the price reduction at retail centres nationwide.

He said, “We have not started picking up products from the Port Harcourt refinery, even from the Dangote refinery. But some of our members, out of their magnanimity, are trying to sell at a cheaper price even in Abuja.

“Dangote price mechanism brings value for PETROAN members, and we are partnering with MRS filling station to sell at N935 per litre nationwide. Our members partnering with MRS will do that. The station has opened its valves to accommodate as many members that can work with them. So from this morning (Sunday), we were already up and running on their platform to register our members. It is a wonderful thing that is coming up and we hope NNPCL will also follow suit.

“The economies of scale favour Dangote, but NNPCL is doing its best to flood the country with available products. I think a lot of good things will happen in the sector even till the new year.

“So let’s see how offtake of products will pan out across the country from tomorrow. If the demography of offtake spreads everywhere and we can compute what the logistics costs would be, it will be easy to predict what will happen. But, certainly, when refiners reduce price, and we can buy directly, we will ensure Nigerians benefit, and that is what PETROAN is doing.”

Also, on a potential price drop, the PETROAN official said, “We have mentioned severally that pricing was still going to drop, and that is the trajectory and reality of how this whole thing is going to play out. So gradually, the price will go down and then come down and vary. It’s not going to be static, and that is why I think it’s not right to do an armchair projection.”

Meanwhile, the Dangote Refinery has said it is now operating at 85 percent capacity and is on course to deliver European-standard products by January.

“We have gone up to 550,000 bpd, that is 85 per cent capacity in crude distillation,” Edwin Devakumar, head of the refinery, said in an interview with CNBC Africa.

The 650,000-bpd Dangote oil refinery built by Nigerian billionaire Aliko Dangote in Lagos aims to compete with European refiners when operating at full capacity but has been struggling to secure sufficient crude locally.