Why petrol prices may drop again as marketers move to import

• The landing cost of petrol has crashed by 20,34% to N1871 in the last three months despite deregulation
• Data released by the Major Energies Marketers Association (MEMAN) shows that oil marketers imported petrol at N1,219 per litre
• Despite this reduction, the retail price of the commodity rose by N443 or 71.79% from N617 per litre on August 1, 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The landing cost of Premium Motor Spirit, also known as petrol, in Nigeria, has fallen by 20.34% to N971,57 litres over the past three months.

The decline in landing costs, which shows the price of importing and distributing the product, shows some relief regarding global market fluctuations and supply chain factors.

Marketers report a drop in petrol landing costs as NNPC warns marketers Credit: Bloomberg/Contributors
Source: UGC

Petrol prices rise despite crash in landing cost

Despite this reduction, the retail price of the commodity rose by N443 or 71.79% from N617 per litre on August 1, 2024, to N1,060 per litre by November 8, 2024.

Data released by the Major Energies Marketers Association (MEMAN) shows that oil marketers imported petrol at N1,219 per litre in August at a Brent crude price benchmark price of $80.72 per barrel and at an exchange rate of N1,611 per dollar. Petrol was reportedly sold at N617 per litre at this period.

However, in November, at the landing cost of N971.57, with Brent crude selling at $75.57 per barrel and the FX rate at N1,665.84 per dollar, petrol price sold at N1,060 at NNPC retail stations and N1,180 at other filling stations.

Prices to crash further at the pumps

The MEMAN document showed that the landing cost was N945.63 per litre in September 2024 and N903,64 per litre in October 2024. 

The increase is due to factors such as the fuel market's deregulation, exchange rate fluctuations, rising inflation, and broader economic challenges in Nigeria.

Experts are optimistic that the current reduction would lead to a decrease in the pumps.

Punch reports that the Nigeria Labour Congress (NLC) accused fuel marketers of inflating petrol prices, saying the price is higher than the actual market value.

The labour union disclosed this in a communique following its National Executive Council meeting, saying that Nigerians are being exploited, with citizens facing heightened hardship and hunger due to government policies that are pushing them into poverty.

Refiners kick against petrol imports

Legit.ng earlier reported that the Crude Oil Refinery Owners Association of Nigeria (CORAN) has cautioned the Nigerian government over granting import licences to petroleum marketers to bring refined products into the country.

The refiners’ assertion came amid controversy between the Dangote Refinery and oil marketers.

Marketers vow to crash petrol prices

Members of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) disclosed that they would import petrol to sell below the N990 per litre offered by the Dangote Refinery, stating the association was waiting for the approval of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Also, the Independent Petroleum Marketers Association of Nigeria (IPMAN) was processing its import license with NMPRA, saying it might be cheaper than buying from the Lekki-based refinery.

Importers dump rejected products in Nigeria

CORAN’s publicity secretary, Eche Idoko, expressed concern that the marketers are still insisting on importing substandard petrol into Nigeria.

Idoko disclosed that some international traders want to use the Nigerian market as a dumping ground for off-spec petroleum products, which were rejected in Europe.

He asked the NMDPRA to stop issuing import licenses to those importing products with enough supplies in Nigeria.

He said that the Petroleum Industry Act (PIA) does not prevent the regulator from issuing imports but allows for backward integration.

Filling stations crash prices by N80

Legit.ng previously reported findings show that oil marketers have crashed petrol prices by N80 from N1,200 to N1,120 as the product's landing cost crashed.

Data from the Major Energies Marketers Association of Nigeria (MEMAN) shows fuel landing cost dropped to N939.86 on November 1, 2024, from N981 per litre on September 25, 2024.

According to the MEMAN data released on Monday, November 4, 2024, the landing cost of diesel, as of November 1, 2024, stood at N1,048.88, while aviation fuel stood at N1,117.94.

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Source: Legit.ng