Petrol landing costs drop 20% in Nigeria, but retail prices rise sharply, sparking concerns over inflation and fuel deregulation effects.
[dropcap]N[/dropcap]igeria’s Premium Motor Spirit (PMS) costs have seen a significant 20.34% reduction in landing costs over the last three months, with prices dropping to N971.57 per litre.
This decline marks some relief in global oil markets and supply chain pressures. However, despite lower landing costs, retail petrol prices in Nigeria have surged, climbing 71.79% from N617 per litre in August to an unprecedented N1,060 per litre at Nigerian National Petroleum Company Limited (NNPCL) stations and even reaching N1,180 per litre at independent marketers’ outlets by early November.
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The latest figures, released by the Major Energy Marketers Association’s competency centre, provide context for these shifts.
In August, Nigerian oil marketers imported petrol at an average cost of N1,219 per litre, with Brent crude prices around $80.72 per barrel and an exchange rate of N1,611 per dollar.
Petrol retailed at N617 per litre during this period. However, by November, despite a drop in the Brent crude benchmark to $75.57 per barrel and a landing cost reduction to N971.57, the final pump price saw substantial increases.
A review of previous months shows a steady reduction in landing costs, from N945.63 per litre in September to N903.64 in October.
Experts attribute the retail price hike to ongoing fuel market deregulation, exchange rate volatility, inflation, and broader economic issues in Nigeria.
The Nigeria Labour Congress (NLC) voiced its concerns on Sunday, accusing fuel marketers of inflating prices and burdening citizens.
Following a National Executive Council meeting, the NLC released a communique stating that Nigerians are facing unnecessary hardship due to market pricing discrepancies and broader government policies.
According to the NLC, these conditions are driving many into poverty, calling for urgent accountability from both the government and fuel marketers to mitigate the impact on Nigerians’ welfare.
With experts urging that reductions in landing costs should ideally reflect in retail prices, Nigerians await possible interventions to ease the financial strain caused by rising petrol costs.
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