Nigeria’s petrol landing cost has risen to ₦1,420 per litre, widening the pressure on downstream operators as the escalating U.S.-Iran conflict continues to drive higher replacement costs across the international oil market.
As at the time of writing, 04:30am (WAT), Brent crude was trading at $107.50 per barrel, down 1.11%, while WTI stood at $104.30 per barrel, down 1.46%. Despite the decline, Brent remains close to the $110 threshold as disruptions around critical Middle East supply routes continue to influence the market.
The latest PMS landing cost is now ₦70 per litre above Dangote Petroleum Refinery’s current PMS gantry price of ₦1,350 per litre. The disparity comes as depot marketers are already selling petrol below Dangote’s benchmark in some locations, even as the cost of replacing the product has moved significantly higher.
The increase in replacement cost is coming against heightened disruption risks in the Middle East, including the shutdown of Saudi Arabia’s East-West Pipeline following attacks and continued Houthi attacks around the Red Sea and Bab el-Mandeb. The East-West Pipeline can transport about 4 million barrels of crude per day, making the disruption significant for regional and global supply flows.
For Nigeria’s downstream market, the widening spread between the ₦1,420 landing cost and ₦1,350 Dangote gantry price is increasing pressure on the current pricing structure. Depot operators with lower-cost inventories can continue to offer below the refinery benchmark, but marketers replacing volumes at current costs face a substantially higher acquisition position.
With PMS replacement cost now standing ₦70 above Dangote’s prevailing gantry price, sustained pressure from international crude and supply-route disruptions could trigger an upward review of the refinery’s petrol price, which would subsequently provide a new wholesale benchmark for depot marketers.