The landing cost of petrol, known as Premium Motor Spirit, has fallen to N981 per litre, as reported by the Major Energies Marketers Association of Nigeria on Thursday. This marks a decrease from approximately N1,130 in recent weeks, reflecting a drop of over N140 due to declining global crude oil prices.
The cost of refined petroleum products, including petrol, diesel, and aviation fuel, is largely influenced by crude oil prices and foreign exchange rates. In August 2024, Brent crude, the global benchmark, traded at over $80 per barrel but has since fluctuated between $70 and $75 per barrel, recently reported at $71.41, down from $73.46 the previous day, according to industry sources.
Data from Statistica indicated that Brent averaged $80.36 per barrel in August, a decline from the prior month attributed to reduced oil demand in China and expectations of increased production from the Organisation of Petroleum Exporting Countries (OPEC).
Despite the decrease in petrol landing costs, pump prices across Nigeria have risen, prompting major oil marketers to begin importing petrol. Previously, the Nigerian National Petroleum Company Limited (NNPC) was the sole importer before pump price increases and the start of operations at the Dangote Petroleum Refinery.
Punch News Reports from September 18, 2024, revealed that three significant oil marketers anticipated the arrival of imported petrol vessels. These vessels were transporting around 141 million litres of petrol to Nigeria, following the full deregulation of the downstream oil sector by the Federal Government. Some of these vessels have now arrived.
As the Dangote refinery enhances local petrol production after years of reliance on imports, the Major Energies Marketers Association of Nigeria noted that the landing cost of petrol began declining in mid-July, even dipping below N950 in early September, despite the dollar’s rising value against the naira.
Currently, the average ex-depot prices of petrol vary, ranging from N865 to N1,200 in Lagos, N980 to N1,400 in Calabar, and N1,200 to N1,400 in Port Harcourt as of Wednesday. Diesel is now priced at a landing cost of N1,089 per litre, while aviation fuel costs N1,117.34. The average ex-depot price for diesel is approximately N1,165 in Lagos and between N1,200 and N1,200 in Calabar and Port Harcourt.
A price comparison indicates that petrol imported may cost N83 more than that produced locally by Dangote, based on N898, the price the NNPC claimed it pays for Dangote fuel. However, Dangote officials have denied selling petrol to the NNPC at this price and have not provided alternative figures for over a week.
In a notable shift, the NNPC raised petrol prices on the same day that Dangote refinery announced its locally produced fuel. Prices surged from around N600 to N855 and N900 per litre. Following the commencement of petrol sales, the NNPC stated it would sell petrol from the Dangote refinery at prices exceeding N1,000 per litre in northern regions.
NNPC spokesperson Olufemi Soneye indicated that prices might reach N1,019 per litre in Borno State and N999.22 in Abuja, Sokoto, and Kano. In the southern regions, prices will be around N960 per litre, with the lowest in Lagos being N950.
However, it has been noted that while some areas report petrol prices above N1,200 per litre, certain major marketers are still selling it for N910 in Lagos.
In a recent discussion with media professionals, NNPC’s Executive Vice President for Downstream, Dapo Segun, highlighted that pricing remains market-driven despite agreements with Dangote. He explained the negotiation process, emphasizing the need for both parties to reach a mutually acceptable price.
As sales of petrol continue at the Dangote refinery, there is hope among Nigerians that prices may decrease further when local crude sales commence on October 1st.
SOURCE: News Hub Creator
