A new report on the downstream oil market by the Major Energies Marketers Association estimated that the landing cost of Premium Motor Spirit (PMS), also known as petrol, on Nigeria’s shores has reduced by about 20.34%, dropping to N971.57 per litre over the past three months.
The association, in its Competency Centre Daily Energy Bulletin, indicated that oil marketers imported petrol at N1,219 per litre at a Brent crude oil price benchmark of $80.72 per barrel and at an exchange rate of N1,611 per dollar in August as petrol sold then at N617 per litre during this period.
The report showed that the landing cost stood at N945.63 in September 2024 and N903.64 per litre in October 2024, linking the drop in the landing costs to factors such as the ongoing deregulation of the fuel market, fluctuations in the exchange rate, rising inflation, and the broader economic challenges facing the country.
In November, with an estimated landing cost of N971.57, Brent crude price benchmark of $75.57 per barrel and an exchange rate of N1,665.84/$1, the data revealed petrol sold at N1,060 per litre at Nigerian National Petroleum Company Limited (NNPCL) retail stations, and at N1,180 in stations owned by independent marketers.
Industry experts believe that the reduction in the landing cost of petrol over the period covered by the report should have led to a corresponding drop in the retail price of petrol at filling stations nationwide.
However, realities in the downstream oil market did not align with the experts’ projection as petrol pump price per litre has maintained an upward swing over the past months with the negative implications for travellers, businesses and the nation’s economic growth.
This decline in landing cost, which reflects the price of importing and distributing the product, indicates some relief in terms of global market fluctuations and supply chain factors.
However, despite this reduction, the retail price of petrol in Nigeria has sharply increased by N443, or 71.79 per cent, from N617 per litre on August 1, 2024, to N1,060 per litre by November 8, 2024.
