Depot petrol prices have entered a new phase as marketers cut their previously elevated rates across Nigeria, offering temporary relief to suppliers and motorists.

The reductions come amid intense competition in the downstream petroleum market, even as rising international crude prices, freight costs and petrol landing costs threaten to push prices higher again.

Depot petrol prices drop

Previous data monitored by Legit.ng showed that depot petrol prices had climbed as high as N1,315 per litre, contributing to higher pump prices across several parts of the country.

The surge pushed petrol prices at some filling stations to between N1,350 and N1,400 per litre, increasing pressure on motorists and households already dealing with elevated transportation and living costs.

However, fresh data from PetroleumPriceNG indicates that several depot operators have now r duced their prices as they compete with domestic refiners, particularly the Dangote Refinery.

Average depot prices have fallen from about N1,315 to roughly N1,270 per litre.
The latest figures show Optima selling at N1,275 per litre, Soroman at N1,295, Masters at N1,270, Dangote at N1,265 and MRS Tin Can at N1,267 per litre.

The price adjustments highlight the rapidly changing dynamics of Nigeria's downstream petroleum market, where local supply, crude prices and replacement costs continue to influence petrol prices.

Crude oil prices raise fresh concerns

Despite the recent reductions, analysts have warned that petrol prices could remain volatile as international crude oil benchmarks move higher.

Osas Igho, a financial analyst, said motorists should not assume that the recent price cuts will continue, particularly amid geopolitical tensions in the Middle East.

"I don't see it decreasing anytime soon. Instead, I foresee a hike due to the surging crude oil price, which is close to $100 barrel at the moment," he said.

Higher crude prices typically increase the cost of replacing imported petroleum products, putting pressure on marketers and refiners to adjust their selling prices.

Dangote Refinery faces pricing pressure

Meanwhile, the Dangote Refinery could review its gantry prices if the sustained rise in interna-tional crude benchmarks continues to increase petroleum product replacement costs, industry sources told PetroleumPriceNG.

The refinery currently sells petrol at N1,265 per litre at the gantry, while automotive gas oil (AGO), commonly known as diesel, is priced at N1,850 per litre.

The refinery's pricing position is also being affected by rising freight and shipping costs, which have increased the cost of moving petroleum products. Nigeria's petrol landing cost has risen to N1,314.67 per litre, while diesel landing cost stands at N1,850.66 per litre.

The widening gap between prevailing market prices and replacement costs could place additional pressure on refiners and marketers.

For motorists, the latest depot reductions offer some relief, but the broader market remains vulnerable to another price increase if crude oil, freight and other international costs continue rising.