Petrol Prices Slump in Nigeria Amid Drop in Global Oil Prices
In a rare move, the landing cost of petrol in Nigeria has plummeted to N981 per litre, according to data released by the Major Energies Marketers Association of Nigeria (MEMAN). The cost had fallen by over N140 between September 25, 2024, and mid-July, a clear indication that the global price drop in crude oil had started to affect the petrolemic industry.
Crude oil prices had been trending downward since this month, with Brent prices hovering between $70 per barrel and $75 per barrel. In August 2024, the price averaged around $80.36 per barrel, and according to Statistica, a global statistical firm, this marked a decrease from the previous month, coinciding with lower oil demand in China and OPEC’s increased production expectations.
Despite this development, motorists across Nigeria continue to encounter price hikes at the pump stations. On the other end of the spectrum, importers are starting to cash in, as the Federal Government continues to deregulate the downstream oil sector, leading to an influx of foreign suppliers.
In August, it was reported that three major oil marketers imported vessels containing 141 million litres of petrol, amid full deregulation of the downstream sector. These markers confirmed on Thursday that a portion of the vessels have already arrived in Nigeria, fuelling speculation that an imminent increase in petrol sales will accompany the Dangote Petroleum Refinery, which started local production, effectively breaking Nigeria’s longstanding dependence on foreign fuel suppliers.
With this new turn of events, the once-revolutionary price range for the newly produced Nigerian petrol remains shrouded in secrecy. While there is uncertainty about the full cost breakdown, officials disclosed that diesel currently costs an average N1,089 per litre, while aviation fuel averages N1,117.34 per litre. Some dealers have set the landing cost of gasoline at around N898. However, this figure does not represent the final sticker price due to additional elements, like marketing and taxes.
Given these factors, experts foresee the possibility that prices might crash once crude oil starts flowing from naira exports, which the Federal Government plans to activate by October 1, 2024. Many believe this could bring further price reduction and stabilize prices.
One question remains clear, though: will petrolemic companies decide to exploit this window or respond proactively to rising consumer needs?
