By Benson Daniel
The price of Premium Motor Spirit, popularly known as petrol, has climbed to about N1,350 per litre in several parts of Nigeria as the dispute between Dangote Petroleum Refinery and petroleum marketers intensifies.
The latest increase has further heightened concerns among motorists and consumers, with pump prices now ranging between about N1,310 and N1,400 per litre depending on location.
The development followed another upward adjustment in Dangote Refinery’s petrol gantry price. The refinery increased the price from N1,200 to N1,265 per litre effective August 29, representing a N65 increase in a single adjustment.
The latest increase was the third price adjustment by the refinery within eight days. Its gantry price had previously risen from N1,165 to N1,185 per litre on August 21 before another increase took it to N1,200 on August 26.
The cumulative adjustments have increased Dangote’s petrol gantry price by N100 per litre within eight days, putting additional pressure on marketers and retailers.
Marketers have subsequently adjusted their pump prices to reflect the higher cost of obtaining the product, with transportation, depot charges and other distribution expenses further widening the price difference between locations.
While petrol is selling at about N1,310 per litre in Lagos and Ogun, prices have risen to N1,350 or more in northern states and other locations farther away from the refinery.
In some areas, the pump price is approaching N1,400 per litre, reflecting the additional logistics costs involved in transporting petroleum products from coastal markets to distant parts of the country.
Dangote Refinery has defended the latest price increases, explaining that the cost of crude oil purchased earlier remains a major factor in determining the current price of refined products.
The refinery noted that there is a considerable time lag between purchasing crude oil, arranging transportation, receiving the crude and processing it into finished petroleum products.
The explanation comes amid concerns over the relationship between falling international crude prices and rising domestic petrol prices.
Industry stakeholders have continued to debate the pricing structure of refined petrol, particularly as domestic refining capacity expands and marketers seek greater flexibility in sourcing products.
The disagreement has also revived concerns about competition within the downstream petroleum market and the impact of pricing decisions on consumers.
Marketers have argued that increased competition should ultimately help moderate prices, while refiners have maintained that their pricing decisions must reflect the actual cost of crude and other operational expenses.
The latest development has therefore placed renewed pressure on industry regulators and the Federal Government to ensure transparency in the downstream petroleum market while allowing market forces to determine prices under the deregulated system.
For consumers, however, the immediate concern remains the rising cost of transportation and household goods as higher petrol prices increase operating expenses for businesses and transport operators.
The continued volatility in petrol prices is expected to keep pressure on households and businesses, particularly if the latest adjustments are sustained across the distribution chain.
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