Fuel Price To Increase As Oil Hits $95.70 Per Barrel

The ongoing increase in crude oil prices, which reached $95.70 per barrel on Monday, up from $94 per barrel over the weekend, coupled with inflation and the depreciation of the Naira, has led to a rise in the cost of imported fuel on the global market.

According to the latest report from the Organization of Petroleum Exporting Countries (OPEC) obtained by Waffi Tv, the price of the OPEC Basket, comprising various types of crude oil, has also risen to $95.70 per barrel from $94.

Oil traders have indicated that refineries are likely to pass on the elevated oil prices to fuel importers, including Nigeria, which relies entirely on global market imports for its petrol supply.

However, the increased cost of imports will necessitate more Naira, which currently exchanges at a rate of N950 per United States dollar, further impacting the nation’s economy. The National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, was unavailable for comment.

However, an authoritative industry source, who pleaded anonymity, said: “The price of crude oil continues to rise in the international market. At N950/$, foreign exchange is a major problem that can push landing cost to more than N600 per litre, from over N500 per litre. Also, fuel subsidy has risen to more than N160 per litre, from the previous N150 per litre. The market is haunted by instability. This is why oil marketers have not been able to import the product, several months after the deregulation of the market.”

In August 2023, Waffi TV reported a 7.5 percent increase in crude oil prices, reaching $85.89 per barrel, up from $79.92 per barrel in July 2023. This, combined with the depreciation of the Naira to N775 per dollar in the official market and an inflation rate of 22.79 percent, contributed to raising the landing cost of petrol to N600 per litre in the domestic market.

It’s worth noting that the landing cost does not include additional expenses such as depot-related charges, transportation, and marketers’ margins, which collectively push the price at filling stations to over N700 per litre.

Sources within the oil marketing industry had informed Waffi TV that the landing cost for September 2023 is anticipated to increase further, as the factors that drove up costs in August have deteriorated.

However, NNPC Limited and major marketers continue to sell the product at N568 per litre, while independent retailers are charging higher prices, ranging from N570 to N700 per litre in various parts of the country, depending on the location.

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