Petrol Landing Cost Drops to N971/Litre, Yet Retail Prices Surge – Report

The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has witnessed a significant reduction of 20.34% over the past three months, now standing at N971.57 per litre, according to a new report. This drop reflects a relief in global market fluctuations and improvements in supply chain dynamics.

Despite this decline in the cost of importing petrol, the retail price has soared by N443, or 71.79%, rising from N617 per litre on August 1, 2024, to N1,060 per litre by November 8, 2024. The data, provided by the Major Oil Marketers Association of Nigeria (MOMAN) in its daily energy bulletin, shows that marketers imported petrol at N1,219 per litre in August, based on a Brent crude price of $80.72 per barrel and an exchange rate of N1,611 per dollar. At the time, the retail price was N617 per litre.

In November, however, the estimated landing cost of petrol was N971.57, based on a lower Brent crude price of $75.57 per barrel and an exchange rate of N1,665.84 per dollar. Yet, petrol is now retailing at N1,060 per litre at the Nigerian National Petroleum Company (NNPCL) retail stations and as high as N1,180 at independent marketer stations.

The report also highlighted that the landing cost dropped further in September 2024 to N945.63 per litre and in October to N903.64 per litre. Despite these falling costs, retail prices have continued to rise, largely due to the ongoing deregulation of the fuel market, exchange rate fluctuations, inflation, and broader economic challenges facing the country.

Experts suggest that the reduced landing cost could eventually lead to a decrease in retail petrol prices. However, the Nigeria Labour Congress (NLC) has raised concerns, accusing fuel marketers of inflating petrol prices. In a statement issued after its National Executive Council meeting, the NLC condemned the high retail price, claiming that the price is significantly higher than the actual market value. They emphasized the increasing hardship faced by Nigerians due to the rising fuel prices and called on both marketers and the government to be held accountable for their role in the economic distress of citizens.