The Major Energy Marketers Association of Nigeria (MEMAN) has reported a significant development in Nigeria’s fuel importation landscape. As of 22nd January 2025, the landing cost for Premium Motor Spirit (PMS), commonly known as petrol, has been calculated at ₦944 per litre, based on key variables including freight, exchange rates, and other charges.
This cost is seen as an improvement for importers, offering private depot owners and independent marketers a pathway to profitability. With the average ex-depot price across all locations ranging from ₦950 to ₦980 per litre, importers stand a chance to cover costs and generate sustainable margins.
MEMAN’s Detailed Calculation of Landing Costs
MEMAN’s methodology reveals the breakdown of how this figure was reached. Using the CBN’s weighted average exchange rate of ₦1,548/USD and factoring in a product quantity of 38,000 metric tonnes for PMS, the freight cost, port charges, and other related expenses, the landing cost now stands significantly lower than recent historical averages. Key assumptions include:
- Freight and Finance Charges: 10-day voyage costs and financing at 32% annual interest for 30 days were incorporated.
- Port Fees and Levies: Fees for towage, berthing, cargo dues, and other statutory charges, including NIMASA’s 2% levy and NPA costs, were added.
- Regulatory Charges: MEMAN also included the mandatory NMDPRA and MDGIF levy of 0.5% each on the product’s price.
Improved Profitability for Marketers
With these updated calculations, independent marketers and depot owners can now sell petrol at ex-depot prices ranging between ₦950 and ₦980 per litre. This range ensures enough margin for bulk buyers, particularly in the Lagos market.
Furthermore, MEMAN’s data highlights the potential to stabilise Nigeria’s fuel supply chain, allowing marketers to import without the fear of running at a loss. This marks a significant shift from previous periods when high landing costs eroded profitability.
Implications for the Nigerian Energy Market
The updated landing costs and aligned ex-depot pricing signal a more profitable environment for stakeholders in the downstream oil and gas sector. However, it also underscores the continued impact of exchange rate fluctuations and freight costs on Nigeria’s energy market.
As marketers strategies to leverage this new cost structure, MEMAN’s report serves as a vital insight into ensuring more competitive pricing while securing energy supply for Nigeria.