The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to N981 per litre, according to data released by the Major Oil Marketers Association of Nigeria (MOMAN) on Thursday. This marks a decrease of over N140 from the previous weeks, when the landing cost stood at around N1,130 per liter, driven by a decline in global crude oil prices.
Crude oil prices and exchange rates are key factors influencing the cost of refined petroleum products like petrol, diesel, and aviation fuel. Brent crude, the global oil benchmark, averaged over $80 per barrel in August 2024 but has fluctuated between $70 and $75 per barrel in September. As of Thursday, it was trading at $71.41 per barrel, down from $73.46 the previous day, according to data from the Petroleum Ministry.
Statistica, a global statistical firm, reported that Brent's average price in August was $80.36 per barrel, reflecting a decrease from July due to reduced oil demand from China and expectations of increased production by the Organisation of Petroleum Exporting Countries (OPEC).
Despite the drop in petrol landing costs, retail prices remain high, and major oil marketers have begun importing petrol. The Nigerian National Petroleum Company Limited (NNPC) had been the sole importer of petrol until the recent price hike and the commencement of production by the Dangote Petroleum Refinery. On September 18, 2024, The PUNCH reported that three major oil marketers were expecting petrol shipments. As of Thursday, some vessels carrying approximately 141 million litres of PMS had arrived in Nigeria.
The Dangote Refinery has also started ramping up local petrol production, signaling a potential shift after decades of reliance on fuel imports. According to MOMAN, petrol landing costs began to decline in mid-July, falling below N950 in early September, despite the rising dollar against the naira. The landing cost was calculated at an exchange rate of N1,667.22 per dollar.
As of Wednesday, the average ex-depot price of petrol ranged from N865 to N1,200 in Lagos, between N980 and N1,400 in Calabar, and from N1,200 to N1,400 in Port Harcourt. The landing cost of diesel stands at N1,089 per litre, while aviation fuel costs N1,117.34 per litre. Ex-depot diesel prices averaged around N1,165 in Lagos and N1,200 in Calabar and Port Harcourt.
There is a potential price difference of about N83 between imported petrol and Dangote’s product, with the NNPC claiming it bought Dangote fuel at N898 per litre, though the refinery has not confirmed this.
Earlier, the NNPC raised petrol prices on the same day Dangote's locally-produced fuel was launched. Prices surged from N600 to between N855 and N900 per litre, with NNPC setting the highest price in northern states at N1,019 per litre. In southern areas like Lagos, prices were lower, around N950 per litre.
Despite some areas selling petrol as high as N1,200 per litre, certain major marketers in Lagos still offer it at N910. During a recent media interaction, NNPC Executive Vice President, Downstream, Dapo Segun, stated that petrol pricing remains market-driven, despite negotiations between NNPC and Dangote Refinery.
The ongoing sale of PMS to NNPC from the Dangote Refinery has given Nigerians hope that petrol prices will decrease when the naira crude sale begins on October 1, 2024.
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