The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has explained why the recent decrease in the gantry price of fuel by the Dangote Refinery has not trickled down to retail outlets across the country. Speaking on Channels Television’s The Morning Brief on Wednesday, the President of PETROAN, Billy Gilly-Harry, said that local fuel pricing is shaped by multiple factors.
“Prices reflecting are dependent on availability, cost, and preparing the particular petroleum to be delivered to the people,” he said. READ ALSO: Dangote Boosts Local Petrol Supplies As Refinery’s Production Hits 700,000b/d When asked why price increases are felt immediately while decreases take longer, Herry pointed to the realities of supply management.
“It is mainly affected by whether the producer has additional resources or not at the time. Increases in prices are mainly caused by the need to restock. There must be that advantage pushing the price upward to be able to pay for new supplies,” he explained. On whether existing stock must be exhausted before prices can drop, the PETROAN president acknowledged that this is generally the case.
“That’s the basic idea. But in petroleum, a mixture is involved, and loss is taken, though not in a way that affects the capital needed to restock,” he noted. Adding to the discussion, an energy analyst, Olabode Sowunmi, highlighted the broader complexities behind Nigeria’s fuel pricing.
He stressed that while the global price of crude oil is often seen as a major determinant, its influence is not always direct in the Nigerian context. “Global price of crude oil is a factor but a factor internationally and not necessarily in Nigeria,” he stated.
Sowunmi pointed to the example of Dangote Refinery, which, as a primary supplier of gas and some retail products, has agreements to allocate a percentage of his crude for Nigeria at a fixed price pegged in naira.