The estimated cost of landing Premium Motor Spirit (PMS), also known as petrol, in Nigeria has fallen by 20.34% to N971.57 per litre over the past three months, according to the latest daily energy bulletin from the Major Oil Marketers Association of Nigeria (MOMAN), released on November 8, 2024.
This decline in landing costs reflects a combination of global market fluctuations and changes in supply chain dynamics. Despite this drop, however, the retail price of petrol in Nigeria has increased significantly. As of November 8, 2024, the price of petrol rose by N443, from N617 per litre on August 1, 2024, to N1,060 per litre. This increase has raised concerns about the disparity between the reduced landing cost and the high retail price.
In August 2024, oil marketers imported petrol at a landing cost of N1,219 per litre, based on a Brent crude oil price of $80.72 per barrel and an exchange rate of N1,611 to $1. Despite this high importation cost, the retail price was pegged at N617 per litre. In November, however, with the landing cost dropping to N971.57 per litre, a lower crude oil price of $75.57 per barrel, and an exchange rate of N1,665.84 to $1, the retail price has risen to N1,060 at the Nigerian National Petroleum Company Limited (NNPCL) stations and N1,180 at independent marketer stations.
Data from MOMAN also revealed that the landing cost had been N945.63 in September 2024 and N903.64 in October 2024. The association, which advocates for the full deregulation of the downstream sector, often attributes fluctuations in petrol prices to factors such as the exchange rate, inflation, and global oil prices.
This development comes amid accusations from the Nigeria Labour Congress (NLC), which has accused petroleum marketers of inflating the pump price of petrol. The NLC claims the retail price is significantly higher than the actual market value, accusing marketers of exploiting Nigerians and adding to the already severe economic hardships caused by government policies. The union argues that Nigerians are enduring increased suffering, with many being pushed deeper into poverty as a result of high fuel prices and rising inflation.
