Nigerians may soon see a drop in petrol prices, as recent data reveals a significant reduction in the cost of importing and distributing the commodity in the country.
The landing cost of Premium Motor Spirit, popularly called petrol, has dropped by 20.34 per cent over the last three months, now standing at N971.57 per litre, a report has found.
This is seen as a positive change due to shifts in global markets and supply chain improvements. However, despite the drop in landing costs, retail petrol prices in Nigeria have increased sharply.
From August to early November 2024, the price of petrol rose from N617 per litre to N1,060, marking a steep increase of N443, or 71.79 per cent. Data from the Major Energies Marketers Association, shared in a daily energy bulletin, shows that in August, oil marketers imported petrol at a high cost of N1,219 per litre. During that period, the Brent crude oil benchmark was $80.72 per barrel, with an exchange rate of N1,611 per dollar, and petrol was sold for N617 per litre.
However, by November, conditions shifted. With a lower landing cost of N971.57, a Brent crude price of $75.57 per barrel, and an exchange rate of N1,665.84 per dollar, petrol was being sold for N1,060 at Nigerian National Petroleum Company Limited (NNPC) stations and even higher, at N1,180, at independent stations. This shows that despite the reduced landing cost, prices at the pump remained high.
The bulletin also revealed a gradual drop in landing costs over the past few months, with petrol landing at N945.63 per litre in September and N903.64 per litre in October. However, high retail prices persisted in Nigeria due to factors such as the ongoing deregulation of the fuel market, the fluctuating value of the naira, rising inflation, and Nigeria’s broader economic challenges.
Meanwhile, experts believe these reduced landing costs should eventually bring down petrol prices.
According to these experts, if the trend of lower landing costs continues, there is hope that retail prices will follow.
On Sunday, the Nigeria Labour Congress (NLC) accused fuel marketers of inflating prices, alleging that the current pump prices do not reflect the true market value.
The body made the remarks in a statement released after a recent meeting.