The Nigerian National Petroleum Company Limited (NNPCL) has reduced the price of Premium Motor Spirit (PMS) to below ₦1,000 per litre.
In a statement issued on Saturday, Dr. Joseph Obele, National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria, described the move as a notable response to the competitive dynamics introduced by deregulation in the downstream sector.
“The price reduction by NNPCL is seen as a response to the competitive impact of deregulation, which has led to increased competition in the downstream sector. The move is expected to spark a price war among oil marketers, ultimately benefiting consumers.
“The company recently reduced the ex-depot price of Premium Motor Spirit (PMS) from ₦1,020 to ₦899 per litre, a move that has been commended by the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN)
“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has hailed the Nigerian National Petroleum Company Limited (NNPCL) for responding to the call for affordable Premium Motor Spirit (PMS) prices,” the statement said in part.
The association said a document released by the NNPC commercial department indicated a reduction based on the regional pricing scheme as:
Lagos: ₦899.0
Warri: ₦ 970.0
Oghara: ₦970.0
Port Harcourt: ₦970.0
Calabar: ₦ 970.0
According to the National President of PETROAN, Dr. Billy Gillis Hary, the price reduction is a welcome development that will bring relief to motorists and Nigerians during the holiday season.
“The reduction in PMS price by NNPCL is a demonstration of the company’s commitment to making petroleum products more affordable for Nigerians,” Dr. Hary said. “We commend NNPCL for responding to our call for affordable PMS prices.”
“The benefits of the price reduction to consumers include:- Reduced transportation costs: With lower PMS prices, motorists will spend less on fuel, leading to increased disposable income, Increased economic activity: Lower fuel prices will stimulate economic growth by reducing production costs and increasing demand for goods and services, – Improved standard of living: “The price reduction will lead to a decrease in the cost of living, enabling Nigerians to afford basic necessities and enjoy a better quality of life.”
Dr Hary also commended Dangote Refinery for its earlier price reduction, which he said had helped to stimulate competition in the downstream sector.
DR Billy hinted at a report submitted by PETROAN’s technical pricing team, which highlights the pros and cons of competitive pricing.
The report noted that competitive pricing allows companies to maintain an advantage by strategically setting prices.
“This approach helps businesses understand their market position, attract new customers, and boost sales.”
However, the report also warned that competitive pricing can lead to compromised product quality. Therefore, PETROAN is calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure compliance with quality assurance standards.
“The Zonal leaderships of PETROAN and state Executive Councils across the 36 states of the federation have expressed optimism that the recent price reduction by NNPC will bring relief and put smiles on the faces of Nigerians at various retail outlets nationwide.
“This optimism stems from the fact that the price reduction will have a ripple effect on the economy, leading to reduced transportation costs, increased economic activity, and an improved standard of living for Nigerians.”
High Chief Sunny Nkpe, Zonal Chairman of the Eastern Zone, speaking on behalf of the Zonal and State leadership, affirmed that as the price reduction takes effect, PETROAN’s Zonal and State Executive Councils will diligently monitor the situation. He emphasized their commitment to ensuring that the benefits of the reduced prices are passed on to consumers while maintaining stability and a conducive environment in the downstream sector.
Dr. Joseph Obele, National Public Relations Officer of PETROAN, expressed optimism that PMS prices could drop further before the end of January 2025. He attributed this possibility to the global decline in crude oil prices and the naira’s recent appreciation against the dollar.
Dr. Obele characterized the situation as a “price war,” highlighting that the reductions by Dangote Refinery and NNPCL showcase the advantages of competition. He also called for the immediate privatization of government-owned refineries to further drive efficiency and market benefits.