The landing cost of Premium Motor Spirit (commonly known as petrol) has fallen to N981 per litre, according to data released by the Major Energies Marketers Association of Nigeria on Thursday.
This reduction, over N140 down from approximately N1,130 in previous weeks, is attributed to the recent decline in global crude oil prices as of September 25, 2024.
The prices of crude oil and foreign exchange rates are key factors influencing the cost of refined petroleum products, including petrol, diesel, aviation fuel, and kerosene.
Brent crude, the global benchmark, traded at an average of over $80 per barrel in August 2024 but has fluctuated between $70 and $75 per barrel this month. On Thursday, it was priced at $71.41 per barrel, down from $73.46 the day before, according to industry data from the petroleum ministry.
Data from Statistica, a global statistical firm, indicates that the average price of a barrel of Brent in August 2024 was $80.36.
“This was a decrease from the previous month, following the lower oil demand in China and announcements that the Organisation of Petroleum Exporting Countries were expecting to increase production,” the firm stated.
As the landing cost of petrol decreases while pump prices rise nationwide, major oil marketers have begun importing the product.
Previously, the Nigerian National Petroleum Company Limited was the sole importer of petrol until recent increases in pump prices coincided with the Dangote Petroleum Refinery’s start of production and distribution.
On September 18, 2024, Waffi TV reported that three major oil marketers anticipated the arrival of vessels carrying imported petrol last week, barring any unforeseen issues. These marketers noted that about 141 million litres of PMS were being shipped to Nigeria following the full deregulation of the downstream oil sector by the Federal Government. They confirmed on Thursday that some vessels had indeed arrived.
This development coincides with the Dangote oil refinery increasing local petrol production after more than 20 years of reliance on imports.
According to the Major Energies Marketers Association of Nigeria (MEMAN), the landing cost of petrol began to decline in mid-July, dropping below N950 in early September. This decline occurred despite the rising dollar exchange rate against the naira, with the landing cost calculated at N1,667.22 per dollar. MEMAN reported that the average ex-depot price of petrol ranged 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. They also stated that the landing cost of diesel is now N1,089 per litre, while aviation fuel stands at N1,117.34.
The average ex-depot price of diesel was approximately N1,165 in Lagos and between N1,200 and N1,200 in Calabar and Port Harcourt.
It was noted that the price difference between imported petrol and that from Dangote could be N83 if calculated using the N898 figure that the NNPC claims it paid for Dangote fuel. However, officials at the $20 billion refinery have denied selling their fuel to the NNPC at N898, and they have not provided an alternative figure for over a week.
It is worth recalling that the NNPC raised petrol prices the same day the Dangote refinery launched its locally produced fuel. The price of PMS surged from around N600 to N855 and N900 per litre, coinciding with the start of PMS sales and the NNPC’s announcement of new prices.
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