The approval of diesel importations by oil marketers is considered a significant move as the increased competition within the Nigerian downstream oil industry has led to reduced prices for consumers.
In its statement on the matter, the Petroleum Products Retail Outlets Owners Association of Nigeria, known as PETROAN, noted that the significant drop in diesel prices resulted from the positive effects of liberalizing the market.
According to the national public relations officer at PETROAN, Dr. Joseph Obele, the entry of several fuel-laden ships caused a dramatic reduction of diesel prices, with the Dangote Refinery reducing the price of Automotive Gas Oil (AGO) from ₦1,800 to ₦1,600 per litre.
The price cut happened just after the Nigerian Midstream and Downstream Petroleum Regulatory Authority licensed five marketers to import the fuel, a development that was met with lawsuits by Dangote Refinery.
The refinery sued on the basis that oil that could be refined within the nation should not be allowed to be imported anymore.
On their part, however, marketers argue that the recent price cut shows how competition has brought balance in the pricing of the fuel.
Obele stated that the current price of the fuel sold by Dangote is lower than what some importers are paying, making it difficult for marketers who have just made fresh imports at higher prices.
He cautioned against monopolistic practices in the oil industry, arguing that the only effective way of reducing prices of fuels would be through stiff competition.
“We celebrate competition and condemn monopoly,” he said.
Experts believe that the recent development will lead to stiff competition and price wars among operators in the fully deregulated Nigerian oil downstream industry.
