Despite decline in global crude prices, Petrol hits N1,735 at some Nigerian depots

The price of Premium Motor Spirit (PMS), popularly known as petrol, has risen to an average of N1,212 per litre across parts of Nigeria, despite a slight decline in global crude oil prices.

The latest increase represents a 4.7 per cent rise from the previous average of N1,158 per litre and has renewed concerns over the continued volatility in the downstream petroleum market.

Brent crude, the international benchmark used to price several crude grades, including Nigeria’s oil, fell slightly to $88.42 per barrel from $88.60.

The Organisation of Petroleum Exporting Countries (OPEC) Basket, which includes Nigeria’s Bonny Light, also declined to $90.28 per barrel from above $94.

Despite the decline in crude prices, checks showed that major marketers adjusted their petrol prices upwards.

MRS, NNPC and Ardova increased their retail prices to N1,205 per litre from N1,125, while Mobil raised its price to N1,215 from N1,209.

BOVAS also increased its retail price to N1,217 per litre from N1,210.

Some depots sell petrol above N1,700

The situation is more pronounced at some petroleum products depots, particularly in Port Harcourt, where petrol prices have climbed significantly above prevailing rates in Lagos.

A mid-day market report showed that 12 depots across Lagos, Port Harcourt, Calabar and Warri recorded some of the highest petrol prices, with the product selling for as much as N1,735 per litre.

Prudent Depot in Port Harcourt recorded the highest price at N1,735 per litre, followed by Zamson at N1,730, Rain Oil at N1,730 and NEPAS at N1,732.

Other Port Harcourt depots also quoted prices above N1,600 per litre, including GulfTreasure at N1,680, Duport at N1,668, IbaChem at N1,668, Ibeto at N1,668, Integrated at N1,670, Menj at N1,670, TMDK at N1,670 and T.Time at N1,668.

The Lagos market recorded comparatively lower prices, although several depots also increased their rates.

MRS quoted N1,207 per litre, up N15 from N1,192, while Pinnacle and NIPCO sold at N1,203 per litre.

BONO and Pivot also increased their prices to N1,203 per litre from N1,195, while African Terminal and Integrated moved from N1,195 to N1,202.

Dangote Petroleum Refinery quoted petrol at N1,200 per litre.

Dangote refinery influences market

An energy analyst who spoke anonymously attributed the development partly to the dominant position of the Dangote Petroleum Refinery in the domestic market.

The refinery, with a stated capacity of 700,000 barrels per day, currently supplies a significant proportion of petrol consumed locally.

The analyst said the size of the refinery meant that its pricing decisions were likely to influence other players in the downstream sector.

Dangote Refinery recently increased its petrol gantry price by N15 per litre, from N1,185 to N1,200.

However, a downstream operator associated with the Major Energies Marketers Association of Nigeria (MEMAN) said petrol prices could eventually decline as marketers gradually recover losses incurred during previous periods of price volatility.

According to the operator, marketers suffered significant losses whenever product prices declined sharply because the value of their existing stock also fell.

He explained that while marketers quickly adjust their systems when prices rise, they tend to reduce pump prices more gradually when costs fall in order to recover part of their losses.

Experts reject return to fuel subsidy

Former Managing Director and Chief Executive Officer of 11 Plc, Adetunji Oyebanji, called on governments to focus on targeted interventions rather than reintroducing fuel subsidy.

He suggested that government could subsidise public transportation, healthcare and education to directly reduce the burden on households.

Oyebanji warned that returning to petrol subsidy would impose significant pressure on government finances, particularly with petrol prices now around N1,200 per litre.

He also called for greater accountability in the management of increased government revenues and advocated wider cash transfers and reduced charges for essential public services.

Dangote raises concerns over petrol imports

Meanwhile, the Dangote Petroleum Refinery and Petrochemicals has expressed concern over the continued issuance of licences for petrol imports despite the availability of substantial domestic refining capacity.

The refinery said imported petrol accounted for about 43 per cent of PMS supplied into Nigeria in July, arguing that the volume of imports had created uncertainty around domestic demand and inventory planning.

According to the refinery, it has maintained significant product inventories and invested heavily in storage, logistics and working capital to ensure uninterrupted supply to the Nigerian market.

However, it said the lack of transparency over expected import volumes makes it difficult to plan production and maintain large inventories efficiently.

The refinery said excess products that cannot be absorbed by the domestic market are subsequently exported to regional and international markets.

It stressed that the increase in its exports should not be interpreted as a failure to meet domestic demand, but rather as an operational response to the uncertainty created by continued petrol imports.

Dangote Refinery reiterated that it remained capable of meeting and exceeding Nigeria’s domestic petroleum product requirements and would continue investing in reliable fuel supply.

The latest development highlights the complex factors driving petrol prices in Nigeria, where crude oil prices, refinery pricing, foreign exchange, logistics, inventory costs, imports and market competition continue to influence the price ultimately paid by consumers.

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