Petrol Landing Cost Falls as Naira Appreciates

The landing cost of petrol in Nigeria has decreased from N981 per litre on September 25, 2024, to N945.63 per litre as of September 27, 2024. This drop, reported by the Major Energies Marketers Association of Nigeria (MEMAN), follows the recent appreciation of the naira against the U.S. dollar.

According to MEMAN’s latest data, the exchange rate improved from N1,667.22 to the dollar on September 25, to N1,586.26 on September 27. The global crude oil benchmark, Brent, also fell from $73.67 per barrel to $72.45, contributing to the reduction in petrol’s landing cost.

Average ex-depot prices for Premium Motor Spirit (PMS) also saw marginal reductions across major ports in Lagos, Calabar, and Port Harcourt. Additionally, landing costs for diesel dropped from N1,089 per litre to N1,068.04, while aviation fuel fell from N1,117.34 per litre to N1,079.79 per litre.

Industry experts noted that the difference between imported petrol and locally produced petrol from the Dangote refinery could be less than N46, based on the N898 per litre price quoted by the Nigerian National Petroleum Company (NNPC) for Dangote-sourced fuel.

In late September, NNPC raised pump prices on the same day that the Dangote refinery launched its locally produced petrol. According to NNPC spokesperson Olufemi Soneye, the company plans to sell Dangote-sourced petrol at prices above N1,000 per litre in northern states, with prices reaching N1,019 in Borno and N999.22 in Abuja, Sokoto, and Kano. In southern states such as Oyo and Rivers, the price would range from N950 to N960 per litre, with Lagos seeing the lowest price at N950.

Despite these new rates, some major marketers continued to sell petrol at N870 per litre in Lagos, even as prices surged to over N1,200 per litre in other parts of the country.

NNPC Executive Vice President of Downstream Operations, Dapo Segun, addressed pricing concerns during a recent media chat, emphasizing that negotiations with Dangote refinery management focused on achieving competitive pricing for locally produced petrol. Segun described a week-long negotiation process, with both parties ultimately reaching an agreement on the price to be paid.

As the sale of petrol from the Dangote refinery to NNPC continues, there is growing optimism that fuel prices will decrease further when naira-denominated crude sales begin on October 1, 2024.