See new fuel price as FG increases petrol landing cost, dash hope of cheaper fuel

• The federal government of Nigeria has adjusted the landing cost of importing petrol into the country
• In a revised template, marketers who were planning to import petrol will pay 4% more to clear their product
• The petroleum market is not fully deregulated, and petrol pump prices will be based on market forces

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends

Hopes of a reduction in petrol prices have been dashed following the Federal Government’s decision to increase the landing cost of imported Premium Motor Spirit (PMS), commonly known as petrol.

The latest data from the Nigerian National Petroleum Company Limited (NNPCL) shows that the landing cost of imported PMS has increased by 4%, from N919.55 per litre in September to N956.13 per litre in October 2024.

Fuel prices are not determined by market forces Photo credit: Bloomberg/contributor
Source: Getty Images

This increase is due to the performance of the naira against the US dollar.

The naira exchange rate currently averages N1,650 in October compared to N1,625/$ in September.

Breakdown of the new landing cost

According to figures obtained from NNPCL’s pricing template, the total direct cost of PMS includes a product cost of N887.45 per litre, freight charges of N10.37 for transportation from Lome to Lagos, port charges of N7.37, a levy by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of N4.47, and storage costs of N2.58.

Vanguard reports that all the aforementioned fees bring the direct cost of PMS to N913.12 per litre.

When finance costs, such as letters of credit (N16.53) and interest (N43.01), are added, the total landing cost reaches N956.13 per litre.

New fuel prices at filling stations

Already, the impact of the rising landing costs has been pushed to petrol pump prices at filling stations.

Legit.ng reported that NNPCL and major marketers’ stations are selling petrol for above N1,000 per litre.

Meanwhile, independent marketers charge between N1,100 and N1,300 depending on the location.

Marketers consider importing petrol

Earlier, Legit.ng reported the Independent Petroleum Marketers Association of Nigeria (IPMAN) has hinted at plans to import more petrol from abroad.

The decision is in line with the full deregulation of the downstream oil sector as outlined in the Petroleum Industry Act (PIA).

Under the deregulation regime, marketers can competitively source fuel from local and international suppliers.

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Source: Legit.ng