Petrol Landing Cost Falls As Naira Strengthens
The landing cost of petrol in Nigeria has decreased from N981 per litre on September 25, 2024, to N945.63 per litre by September 27. This reduction, reported by the Major Energies Marketers Association of Nigeria (MEMAN), is attributed to two key factors: the appreciation of the naira against the US dollar and a decline in the price of Brent crude oil. On September 27, the naira exchanged at N1,586.26 to the dollar, an improvement from N1,667.22 on September 25. Brent crude oil, the global benchmark, also dropped from $73.67 per barrel to $72.45.
In addition to the petrol price drop, the landing costs of diesel and aviation fuel also saw reductions, with diesel falling from N1,089 per litre to N1,068.04, and aviation fuel dropping from N1,117.34 to N1,079.79. The ex-depot prices of Premium Motor Spirit (PMS) also saw a marginal decrease in key cities like Lagos, Calabar, and Port Harcourt.
There has been increased attention on the pricing of petrol following the commencement of sales by the Dangote refinery. When Dangote’s locally-produced petrol entered the market, the Nigerian National Petroleum Company (NNPC) raised the pump price of petrol from around N600 per litre to between N855 and N900 per litre. NNPC disclosed that petrol lifted from the Dangote refinery would be sold at different prices depending on the region, with prices as high as N1,019 per litre in northern states like Borno, and N950 in Lagos.
Despite some areas reporting prices exceeding N1,200 per litre, certain major marketers in Lagos have maintained a lower price, selling petrol at N870 per litre. The disparity in prices is driven by market dynamics, as emphasized by Dapo Segun, the Executive Vice President of Downstream at NNPC. He explained that price negotiations with the Dangote refinery were market-driven, with NNPC agreeing to lift Dangote’s petrol only if it was cheaper than imported fuel.
As Nigerians hope for further price reductions, the expected commencement of the sale of naira crude oil from the Dangote refinery could play a crucial role in stabilizing and potentially lowering petrol prices across the country.
