Dangote Petroleum Refinery has resumed coastal loading of Premium Motor Spirit (PMS) following a six-day halt, but marketers are now paying a significantly higher price for the product.
The refinery began accepting coastal loading orders again on Monday, July 21, after notifying customers on Tuesday of the new terms.
Dangote's new petrol price takes effect
Source: Getty Images
The resumption comes after the facility suspended both coastal and gantry loading on Wednesday, July 15, when it switched to a dollar-denominated pricing model for refined petroleum products.
The new coastal PMS rate is $1,161.23 per metric tonne, up from the previous $1,044.62 per metric tonne, a jump of $116.61/MT, or about 11.2%, according to Petroleumprice.ng
Coastal Loading Resumes With New Pricing
A source with direct knowledge of the development confirmed that depots receiving supplies through coastal channels had already begun passing the update to their own customers.
The source said:
"We have issued communication to all customers loading through the coastal channel, and depots that receive products through coastal deliveries have already started notifying their customers.
"Coastal loading resumed yesterday with the new coastal price. Gantry sales remain on hold, but from what we are seeing, gantry operations may also resume soon."
While marine deliveries are back in operation, truck loading through the gantry remains on hold. Industry operators say the gantry channel is the refinery's primary distribution route, and its return is expected to have the most significant effect on petrol supply across the country and on ex-depot prices at inland locations.
How the Suspension Hit Petrol Prices
The six-day pause in loading forced marketers to turn to private depots to keep their operations running, and the increased cost of sourcing supply was passed directly to buyers.
The average ex-depot price of petrol in Lagos climbed from around N1,075 per litre before the suspension to roughly N1,275 per litre, a rise of N200 per litre or about 18.6%.
Dangote resumes coastal petrol loading after suspension
Source: Getty Images
Before halting operations, the refinery had set its PMS price at $0.779 per litre, diesel at $1.087 per litre, and Jet A1 aviation fuel at $0.942 per litre.
The switch to dollar-denominated pricing was linked to difficulties the refinery faced in procuring enough crude oil under the Federal Government's naira-for-crude exchange arrangement.
Industry sources say the resumption of coastal loading should ease some of the supply pressure on depots served by sea, though the broader market will remain constrained until gantry operations are restored and a revised truck loading price is announced.
Nigerian fuel importers face tough choices
Earlier, Legit.ng reported that Nigerian fuel importers are confronting an increasingly difficult commercial environment as surging international petrol prices and steeper freight charges tighten the economics of bringing petrol into the country, while Dangote Petroleum Refinery's pricing strategy limits their ability to recover those costs.
A Daily Refined Products Commentary published by S&P Global Commodity Insights says market participants have grown more concerned about the widening gap between what it costs to import petrol and what can realistically be charged in the Nigerian market.
