The Major Oil Marketers Association of Nigeria (MEMAN) has announced a decrease in the landing cost of Premium Motor Spirit (PMS), also known as petrol, to N981 per litre. This reduction, from the previous N1,130 per litre, is attributed to the recent decline in global crude oil prices, which fell below $71 per barrel on Thursday.
The cost of refined petroleum products such as petrol, diesel, and aviation fuel is primarily influenced by crude oil prices and foreign exchange rates. Data from the petroleum ministry showed that Brent crude, the global benchmark, has been fluctuating between $70 and $75 per barrel in September, down from an average of $80 per barrel in August. Statistica, a global statistical firm, confirmed that the decrease is linked to lower oil demand in China and an expected increase in production by the Organisation of Petroleum Exporting Countries (OPEC).
In response to the declining landing cost, major oil marketers have resumed the importation of petrol, with vessels carrying around 141 million litres of PMS currently arriving in Nigeria. The Nigerian National Petroleum Company Limited (NNPCL) previously held a monopoly on petrol imports, but the entry of the Dangote Petroleum Refinery into local production has changed the dynamics of the market.
MEMAN reported that despite the fall in landing costs, the ex-depot price of petrol remains high, ranging from N865 to N1,200 in Lagos, N980 to N1,400 in Calabar, and N1,200 to N1,400 in Port Harcourt. Diesel landing cost is currently at N1,089 per litre, while aviation fuel stands at N1,117.34 per litre.
The price differences between imported petrol and the locally produced fuel from the Dangote refinery were noted, with NNPC stating it bought Dangote fuel at N898 per litre, though Dangote officials have not confirmed this figure. NNPC has indicated that the price of PMS may exceed N1,000 per litre in northern regions, with prices as high as N1,019 per litre in Borno State and N960 per litre in southern states like Rivers and Oyo.
During a recent media interaction, Dapo Segun, Executive Vice President, Downstream at NNPC, discussed the ongoing pricing negotiations with the Dangote refinery. Segun shared insights into the discussions: “Dangote said to us, ‘This is how much I want for it (PMS).’ And we said, ‘Hey, Dangote, if we go out there, we can get it for this much, so we won’t pay you this much for it.’” He highlighted that the negotiations were intensive and took over a week to conclude, resulting in an agreement on a fair price for both parties.
Nigerians are hopeful that PMS prices will further decrease when the sale of Naira crude commences on October 1, 2024, providing some relief amid the current high costs.
