Nigeria's oil market is experiencing a significant shift as the landing cost of petrol drops to N797.66 per liter, down from N817.82, amidst a price war sparked by the Dangote Refinery. According to the Major Energies Marketers Association of Nigeria, oil marketers are now buying Premium Motor Spirit (petrol) at the reduced rate, despite efforts to minimize losses.

The current fuel price war in Nigeria was initiated by the Dangote Refinery, which announced a reduction of its ex-depot (gantry) price of petrol by N65, from N890 to N825 per liter, late in February. This move sent shockwaves across the fuel market, forcing importers to adjust their prices to remain competitive.

The latest Competency Centre daily energy data shows that the landing petrol cost dropped from N817.82 per liter to N797.66 per liter. Additionally, the average cost of fuel for 30 days also dropped to N851.76 from N854.15 per liter. While the effects of the landing cost drop are uncertain, it could likely lead to another fuel price decline, benefiting Nigerian consumers, but affecting the bottom line for those importing the product.

Analysts in Nigeria's energy sector argue that oil importers and marketers have been suffering huge losses as a result of the ongoing drop in PMS prices, with an average loss of N75 billion per month and N2.5 billion per day. The exchange rate of N1,517.93 to the dollar and the benchmark price of Brent crude at $70.58 per barrel also contribute to the volatility in the market.

The report highlights that international petroleum product pricing is currently experiencing significant volatility due to geopolitical and economic factors, including events in the Middle East, China's market dynamics, seasonal variations, production status, and other global influences. The foreign exchange rate remains fairly stable, with minimal fluctuations observed over recent periods, making landing cost likely to change several times intra-day.

The ongoing price war and resulting losses for oil importers and marketers raise concerns about the sustainability of the current market dynamics. As the situation continues to unfold, it remains to be seen how the Nigerian oil market will adapt to these changes and what implications they will have for consumers and stakeholders alike.