The Crude Oil Refinery Owners Association of Nigeria has said that Premium Motor Spirit could be sold at ₦300 to ₦400 per litre if the government supports local refining and crude oil price drops to $50 per barrel.
The association, however, said the ₦350 per litre projected price will not be possible if the naira-for-crude oil policy of the Federal Government is not restored.
Oil prices fell to around $65 per barrel last week, the lowest since 2021, following the decision by the United States to raise import tariff and the increase in oil output by OPEC+.
On the back of the development, Brent dropped by about $10 per barrel, while the US crude oil sold for around $61.
The fall in oil prices came even as the landing cost of petrol dropped to ₦865 per litre, but depot prices rose to around ₦900.
Reacting to the development in a statement issued in Abuja on Sunday, the Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, said despite the drop in the crude oil price, petrol would continue to be expensive due to high exchange rates, vessel hiring costs, and the influence of importers who act as middlemen in the distribution chain.
According to him, “Nigerians are expected to see lower prices of petrol as the crude oil price drops, but this may not happen due to the fact that we import the products and middlemen have hijacked the space.”
Idoko also said the government must revive the Naira-for-crude policy that allowed Dangote Refinery and other local refineries to buy crude oil in Naira, noting that the policy made the price of petrol to drop from ₦1,200 to a little above ₦700, before it was suspended.
“We can see that when the naira-for-crude policy was implemented, petrol sold at a little above ₦700. If this had continued, prices would have dropped to around ₦500 per litre.
“If crude oil drops to around $50 per barrel and the government supports local refining through naira crude oil sales, petrol could be sold at ₦350 per litre,” he stated.
Idoko, however, said the projection might not be realised as long as the naira-for-crude policy was not implemented.
S&P Global reported last week that the Nigerian National Petroleum Company Limited failed to deliver 385,000 barrels per day of crude oil to the Dangote Refinery, thereby forcing the company to suspend the supply of petrol in Naira.
CORAN said most modular refineries had shut down due to a lack of crude oil and the inability to source foreign exchange for crude importation.
Idoko said, “The implication of this is that even if oil prices drop to $50 per barrel, the cost of petrol in Nigeria may not change because the country imports petrol through traders who also struggle to access foreign exchange and pay other international trade charges.”
“Today, Nigeria is the only oil-producing country that exports crude oil and imports petroleum products for domestic use,” he said.
He described the now suspended naira for crude policy as the most effective in Nigeria’s recent energy history and urged the Federal Government to revisit it in order to make the benefits of falling oil prices reflect in domestic petrol prices.
Petrol is currently being sold at between ₦920 and ₦970 per litre across major cities in the country.
