The cost of landing Premium Motor Spirit (PMS), commonly known as petrol, in Nigeria has reduced to N900.28 per litre, representing a decline of N36 from the previous week’s figure of N936.75. This is a drop of approximately 3.62%, according to data from the Major Oil Marketers Association of Nigeria (MOMAN).
The landing cost of petrol is the combined expense of importing and distributing the fuel within Nigeria. While this development offers some relief amidst global market volatility, the retail price remains high at N1,060 per litre.
Factors Influencing Landing Costs
Crude oil prices and foreign exchange rates continue to play a pivotal role in determining the cost of petrol. As of Thursday, Brent crude oil was priced at $73.52 per barrel, a slight increase from the previous day’s price of $72.06. The naira traded at N1,533 per dollar on the foreign exchange market, further influencing the pricing structure.
Imported vs Domestic Fuel Pricing
Interestingly, the price of imported petrol is still cheaper than locally refined products. On Thursday, petrol refined at the Dangote Refinery was sold at N970 per litre, while the Port Harcourt Refining Company priced its product at N1,030 per litre.
This pricing disparity highlights challenges in domestic refining, such as high operational costs and dollar-denominated charges.
Fuel Importation Surge
Between December 10 and December 13, 2024, Nigerian oil marketers imported 90,308 metric tonnes of petrol, equivalent to 121.1 million litres. This volume was brought in through four vessels that docked at key ports, including:
- Apapa Port, Lagos
- Warri Port, Delta State
- Onne Port, Rivers State
- Calabar Port, Cross River State
Detailed Shipments
- Stellar: Arrived at Warri Port on December 10 with 15,000 metric tonnes (21.12 million litres).
- Kriti Ruby: Docked at Apapa Port on December 12, carrying 37,308 metric tonnes (50.03 million litres).
- St Lady Meenah: Reached Onne Port on December 12 with 23,000 metric tonnes (30.84 million litres).
- Virgo 1: Scheduled to berth at Calabar Port on December 13 with 15,000 metric tonnes (20.12 million litres).
This renewed import activity comes despite earlier claims by some marketers that they would reduce reliance on imported fuel to prioritise locally refined products.
Economic Implications
While the reduction in landing costs provides some reprieve, the gap between import and retail prices underscores the persistent challenges in Nigeria’s downstream oil sector. The rising operational costs of domestic refineries, coupled with the fluctuating value of the naira, remain significant hurdles.
Outlook for 2025
With global oil prices stabilising and domestic refining capacity gradually improving, stakeholders and the general public hope for further reductions in petrol prices. However, industry experts warn that resolving the broader issues of foreign exchange instability and high refining costs will be critical for sustainable price reductions.
The latest developments also raise questions about the viability of ongoing petrol subsidies and the government’s capacity to support a fully deregulated downstream sector. For now, Nigerians are watching closely as the dynamics of local and global markets continue to shape fuel prices.