Petrol Landing Cost Drops as Crude Prices Fluctuate – Nigerian Marketers Report

 

The Major Energy Marketers Association of Nigeria (MEMAN) has announced a significant drop in the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, in September 2024. According to MEMAN’s latest Competency Centre Energy Bulletin, the landing cost of petrol has decreased from N1,130 per litre in July 2024 to N981.08 per litre in September, reflecting a reduction of N148.92 per litre.

Factors Behind the Landing Cost Drop

The drop in the landing cost of petrol is largely attributed to fluctuating crude oil prices in the global market. In September 2024, crude oil prices ranged between $70 and $75 per barrel, a decrease from the $80 per barrel seen in August. This global price fluctuation directly impacted the cost of importing petrol into Nigeria.

Petrol Prices Still High Despite Landing Cost Reduction

Despite the reduction in the landing cost, Nigerian consumers continue to pay between N950 and N1,100 per litre for petrol, depending on their location. This price range indicates that the decrease in landing costs has not yet translated into significant relief for consumers at the pump.

NNPC Announces Petrol Price Hike After Dangote Refinery Supply

Adding to the fuel price debate, the Nigerian National Petroleum Company (NNPC) recently announced a fresh hike in petrol prices following its procurement of petrol from the Dangote Refinery. As of September 15, 2024, NNPC reported that it purchased domestically-produced petrol from Dangote Refinery at N898 per litre. However, there has been some disagreement over the exact pricing, with the Dangote Group disputing the NNPC’s figures but failing to disclose the actual cost of its products.

Also Read: Economist Warns Against Total Subsidy Removal in Nigeria,Cautions Against Monopoly

Growing Concerns Over Petrol Prices in Nigeria

The rising cost of petrol continues to be a major point of contention within Nigeria’s oil and gas sector, as consumers struggle with escalating energy costs. Although the landing cost has dropped, the continued price hikes at the pump remain a concern for many Nigerians, who are already burdened by high inflation and the rising cost of living.

House of Representatives Pressures Dangote Refinery

In response to the growing tension surrounding fuel prices, the Nigerian House of Representatives has called on the Dangote Refinery to disclose the exact price of its petrol products. Additionally, lawmakers are urging the refinery to sell directly to petroleum marketers in an effort to increase transparency and potentially drive down retail prices.

Dangote’s Call for Subsidy Removal

In a related development, Aliko Dangote, the President of Dangote Group, has reiterated his call for the complete removal of petrol subsidies in Nigeria. In a recent interview with Bloomberg Television, Dangote emphasized the need for the Nigerian government to eliminate fuel subsidies, arguing that it would promote a more sustainable economic environment and stabilize the fuel market in the long term.

Conclusion

While the landing cost of petrol in Nigeria has seen a notable decline due to fluctuating global crude prices, the benefits have yet to fully reach Nigerian consumers, who continue to pay high prices for fuel. With ongoing discussions around fuel subsidies, domestic refining, and pricing transparency, the country’s oil and gas sector remains in a state of flux. Stakeholders, including the government, marketers, and refineries, will need to work together to ensure that the benefits of lower landing costs are passed on to consumers.