A significant drop in the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has sparked anticipation of a potential reduction in the pump price of the commodity.
According to the Major Energies Marketers Association of Nigeria (MEMAN), the landing cost has plummeted to N981 per litre, a substantial decrease from recent prices.
The decline, which is attributed to a drop in global crude oil prices, could bring relief to consumers who have been grappling with rising fuel costs in recent months in the country. The previous landing cost, hovering around N1,130 per litre, has been reduced by over N140 as of September 25, 2024.
Crude oil prices and foreign exchange rates are key determinants of refined petroleum product costs, including petrol, diesel, aviation fuel, kerosene, and others. Brent crude, the global benchmark, has been fluctuating between $70 and $75 per barrel this month, down from an average of $80 per barrel in August.
The decrease in landing cost coincides with the resumption of petrol imports by major oil marketers in Nigeria. Following the recent deregulation of the downstream oil sector, these marketers have begun importing good volumes of PMS to supplement domestic production.
The Dangote Petroleum Refinery, which recently commenced operations, is also contributing to the domestic supply of petrol. However, there have been discrepancies regarding the sale price of the refinery’s product to the Nigerian National Petroleum Company Limited (NNPC). While the NNPC has claimed to purchase the fuel at N898 per litre, the refinery has denied this figure.
It can be recalled that while the NNPC said it bought fuel from the refinery at the price, it hiked the pump price of the commodity to over N1000/litre.
Also, it was observed that the difference between imported petrol and that of Dangote might be N83 less if calculated by N898, which the NNPC claimed it bought the Dangote fuel. This implies that marketers may decide to sell imported fuel for a price comparatively lower than those obtained from Dangote Refinery.
