Emmanuel Ochayi
The cost of landing petrol in Nigeria has dropped by N36, reaching N900.28 per litre on Thursday, December 12, 2024. This price reduction, reported by the Major Energies Marketers Association of Nigeria, represents a 3.62% decline from the previous cost of N936.75 per litre, seen just a week ago.
Despite this decrease, retail petrol prices remain high at N1,060 per litre across the country.
Join our WhatsApp ChannelPetrol Imports and the Decrease in Landing Costs
The fall in the landing cost of fuel follows recent importation efforts, with oil marketers bringing in over 121 million litres of the product between December 10 and December 13, 2024. The volume imported was a result of fresh supply, with more than 90,000 metric tonnes of petrol being delivered to Nigerian ports. This significant import was distributed across several key ports, including Apapa, Warri, Onne, and Calabar.
Although the landing cost of petrol has dropped, reflecting a reduction in the global market price of crude oil and favourable exchange rates, the retail price remains stubbornly high due to various internal factors, such as the cost of locally refined ones. Dealers report that domestically produced petrol is selling for as high as N1,030 per litre, with imported petrol remaining cheaper at N970 per litre.
Crude Oil Prices and Foreign Exchange Rates Impact Petrol Costs
The cost of crude oil, combined with fluctuations in foreign exchange rates, continues to play a pivotal role in determining petrol prices. On Thursday, Brent crude was priced at $73.52 per barrel, up slightly from the previous day’s $72.06 per barrel. Additionally, the exchange rate of N1,533 per dollar has also affected the overall pricing structure of petrol, despite the reduction in landing costs.
One of the key challenges in refining petrol locally is the high dollar charges imposed on domestically refined fuel. Oil marketers have pointed out that this factor, along with the high costs of importing crude oil, has made locally refined petrol more expensive compared to imports. For instance, the price of locally refined petrol from the Port Harcourt Refining Company remains steep at N1,030 per litre.
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Petrol Imports Continue Despite Marketers’ Claims of Halting Imports
Contrary to earlier claims by some oil marketers that they would cease importing petrol and focus on domestic production, recent findings show that marketers have continued to import large quantities of the product. The total amount of fuel imported between December 10 and 13 highlights a continued reliance on imported fuel to meet Nigeria’s domestic demand.
As of Thursday, four vessels, including the Stellar, Kriti Ruby, St Lady Meenah, and Virgo 1, were responsible for delivering significant volumes of fuel to Nigerian ports. These vessels were berthed across the key oil terminals in Lagos, Warri, Rivers, and Calabar, further demonstrating the persistent role of imports in Nigeria’s fuel supply chain.
The Future of Petrol Prices in Nigeria
The recent drop in landing costs provides some hope that it prices in Nigeria could ease in the short term. However, with the challenges of foreign exchange rates and the cost of crude oil imports, it remains unclear when the price of petrol at retail outlets will reflect these reductions.
While marketers are continuing to import fuel, domestic refining remains a critical issue in ensuring a sustainable, lower-cost fuel supply for Nigerians.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
