Petrol Landing Cost In Nigeria Drops, Offering Relief To Consumers

Petrol Landing Cost In Nigeria Drops, Offering Relief To Consumers....KINDLY READ THE FULL STORY HERE▶

The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to ₦981 per litre, according to the Major Oil Marketers Association of Nigeria. This marks a decrease of over ₦140 from the previous weeks, where the cost stood at approximately ₦1,130 per litre, driven by a recent dip in global crude oil prices as of September 25, 2024…….CONTINUE READING 

Naija News reports that crude oil prices and exchange rates significantly influence the cost of refined petroleum products such as petrol, diesel, aviation fuel, and kerosene. In August 2024, Brent crude, the global benchmark, was trading at an average of over $80 per barrel but has since fluctuated between $70 and $75 per barrel this month. On Thursday, it was recorded at $71.41 per barrel, down from $73.46 the previous day, based on data from the Petroleum Ministry.

Statistica, a global statistical firm, reported that the average price of Brent crude in August 2024 was $80.36 per barrel, reflecting a decline due to reduced oil demand from China and signals from OPEC about possible production increases. As petrol landing costs decrease, major oil marketers have resumed importing the product.

Previously, the Nigerian National Petroleum Company Limited (NNPCL) held exclusive rights to import petrol, but following fuel price hikes and the launch of the Dangote Petroleum Refinery, other marketers have joined in. Reports from September 18, 2024, indicated that three oil marketers were expecting vessels carrying 141 million litres of imported petrol, following the government’s deregulation of the downstream oil sector. Some of these vessels have since arrived.

Meanwhile, the Dangote oil refinery has increased local petrol production, marking a shift from Nigeria’s decades-long reliance on fuel imports. According to the Major Oil Marketers Association of Nigeria (MEMAN), the landing cost of petrol began declining in mid-July, falling below ₦950 by early September. Despite the naira’s depreciation, the landing cost is calculated at ₦1,667.22 per dollar.

As of Wednesday, MEMAN reported that ex-depot petrol prices ranged from ₦865 to ₦1,200 per litre in Lagos, ₦980 to ₦1,400 in Calabar, and ₦1,200 to ₦1,400 in Port Harcourt. Diesel’s landing cost is currently ₦1,089 per litre, while aviation fuel stands at ₦1,117.34.

There is also a price difference between imported petrol and that produced by Dangote, which could be as much as ₦83, assuming a purchase price of ₦898 per litre. While the NNPC claims to have purchased Dangote’s fuel at ₦898, officials from the refinery have not confirmed this figure.

The NNPC recently raised petrol prices on the same day Dangote’s refinery launched its locally-produced fuel, with prices exceeding ₦1,000 per litre in northern Nigeria. In Borno State, prices could reach ₦1,019 per litre, while in cities like Abuja and Kano, the price may be set at ₦999.22. In southern states like Oyo and Rivers, the price is expected to be ₦960 per litre, with Lagos seeing the lowest price at ₦950 per litre.

However, petrol prices have been reported to soar to ₦1,200 in some regions, though some retailers continue to offer it for ₦910 per litre in Lagos.

Dapo Segun, NNPC’s Executive Vice President of Downstream, clarified during a media session that while the NNPC has negotiated pricing with the Dangote refinery, market conditions will ultimately determine final prices. Segun explained that negotiations between the NNPC and Aliko Dangote took over a week to finalize, with both parties reaching a price agreement. He confirmed that the NNPC would only purchase PMS from Dangote if it was cheaper than imported alternatives.

Meanwhile, Nigerians remain hopeful that PMS prices will decline when the naira crude sale begins on October 1, 2024.

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