Petrol depot prices fell by up to N24 per litre in Lagos on Tuesday, raising expectations that filling stations may reduce pump prices as they replenish stocks with cheaper supplies.
The reductions were recorded across several major markets amid a decline in international crude oil prices. Diesel prices also fell sharply, dropping by as much as N50 per litre in Warri and N35 in Port Harcourt.
In Lagos, Ascon, Integrated and Sahara cut their petrol prices by N24 to N1,327 per litre, from N1,351. Pinnacle reduced its price by N24 to N1,326, while MRS cut its price by N20 to N1,332. Dangote retained its depot price at N1,325.
In Port Harcourt, Ascon and Integrated reduced their prices by N5 each to N1,815, while Ibeto maintained its price at N1,815. In Calabar, Mainland cut its price by N7 to N1,320, while Alkanes reduced its price by N2 to N1,325.
In Warri, Keonamex reduced its price by N3 to N1,327, while Nepal cut its price by N1 to N1,329.
The diesel market recorded steeper reductions. Matrix in Warri cut its Automotive Gas Oil (AGO) price by N50 to N2,000 per litre, while Masters in Port Harcourt reduced its price by N35 to N1,900. Prudent and Rain Oil in Warri also cut their prices by N10 each to N1,940.
A petroleum products marketer, who spoke on condition of anonymity, said the lower depot prices could put pressure on filling stations to review their pump prices, particularly those buying directly from the affected depots.
However, he cautioned that motorists should not expect immediate or uniform reductions because some filling stations were still selling products purchased at higher prices.
He said competition among filling stations could speed up the transmission of lower depot prices to consumers, especially in areas with several outlets operating close to one another.
The marketer noted that transportation costs, operating expenses and retail margins would also determine the extent of any pump-price reduction.
He cautioned that the N20-N24 decline recorded at some Lagos depots should not be interpreted as an automatic N20-N24 reduction at the pump.
According to him, sustained reductions in wholesale energy prices could lower transportation and logistics costs, providing some relief to households and businesses.
He added that falling diesel prices could have a wider impact on manufacturers, farmers, logistics operators and other businesses that depend on AGO for transportation and backup power.
Meanwhile, international crude oil prices also declined. West Texas Intermediate (WTI) fell by $1.03, or 1.12 per cent, to $91.34 per barrel, while Brent crude dropped by $0.29, or 0.29 per cent, to $100 per barrel.
The marketer, however, warned that crude oil prices, exchange rates and supply costs remained key factors that could reverse the downward trend.
For now, filling stations purchasing fresh supplies at lower depot prices face increasing pressure to adjust their pump prices, although the timing and extent of any reduction will vary by location, stock levels and operating costs.