The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped significantly to N981 per litre, according to data released by the Major Oil Marketers Association of Nigeria (MOMAN) on Thursday.
This marks a notable decrease from the previous weeks when the landing cost stood at around N1,130 per litre.
The drop of over N140 per litre as of September 25, 2024, is largely attributed to the sharp decline in global crude oil prices, which have a direct impact on the cost of refined petroleum products such as petrol, diesel, and aviation fuel.
Foreign exchange rates also play a crucial role in determining these costs.
Brent crude, the international benchmark for oil, was trading at $71.41 per barrel on Thursday, down from $73.46 the previous day. In contrast, the average price in August 2024 was $80.36 per barrel. This price reduction is largely due to a slowdown in demand from China and an anticipated increase in production by the Organisation of Petroleum Exporting Countries (OPEC).
Despite the decrease in landing costs, pump prices for petrol remain high across Nigeria. However, the resumption of fuel importation by major oil marketers is expected to ease supply pressures.
The importation of petrol had slowed down following the full deregulation of the downstream oil sector and the start of local production by the Dangote Refinery.
Three major oil marketers confirmed last week that vessels carrying approximately 141 million litres of petrol were en route to Nigeria.
This fresh supply comes at a time when the Dangote Refinery is ramping up production, offering the potential to further reduce reliance on imported fuel.
According to MOMAN, while the landing cost of petrol is now N981 per litre, the ex-depot price—what oil marketers pay to load fuel from depots—varies significantly across different regions. As of Wednesday, ex-depot prices in Lagos ranged from N865 to N1,200 per litre, while in Calabar, prices were between N980 and N1,400. In Port Harcourt, the cost soared as high as N1,400 per litre.
In addition to petrol, diesel landing costs are currently N1,089 per litre, while aviation fuel is priced at N1,117.34 per litre. Ex-depot prices for diesel in Lagos averaged N1,165, while in Calabar and Port Harcourt, they were around N1,200.
The Dangote Refinery, which recently began contributing to Nigeria’s fuel supply, has sparked debate regarding its pricing. Reports suggest that the Nigerian National Petroleum Company (NNPC) purchased locally refined petrol from Dangote at N898 per litre, although this figure has not been officially confirmed by refinery officials.
NNPC executives have indicated that market forces will ultimately drive the pricing of Dangote-produced petrol, with the NNPC only committing to purchasing the product if it is more cost-effective than imported alternatives.
The recent decline in petrol landing costs is expected to be a positive development for consumers, with many hoping for further reductions at the pump. Nigerians are also optimistic that the upcoming naira crude sale, set to commence on October 1, 2024, will contribute to more stable and affordable fuel prices across the country.
