Nigeria’s Petrol Costs Ease Slightly as Import Volumes Rise
The cost of landing Premium Motor Spirit (PMS), commonly referred to as petrol, on Nigerian shores has fallen to N900.28 per litre, marking a reduction of N36 in just a week. The 3.62 per cent decline, reported by the Major Oil Marketers Association of Nigeria (MOMAN), offers modest relief amidst a backdrop of soaring energy prices.
Earlier in the week, landing costs had dipped further to N890.43 per litre before climbing slightly on Thursday. Despite this decline, the retail price of petrol across the country remains at an eye-watering N1,060 per litre.
Relief Amid Market Turbulence
The drop in landing costs signals a respite from global market volatility and supply chain pressures, which have gripped the oil sector. Crude oil prices, which influence the cost of refined petroleum products, stood at $73.52 per barrel on Thursday, compared to $72.06 the day before. Meanwhile, Nigeria’s exchange rate of N1,533 per dollar continues to play a decisive role in shaping energy costs.
Petrol imports remain a cornerstone of Nigeria’s energy strategy. This week, oil marketers imported a staggering 121.1 million litres of PMS over three days. Documents obtained from the Nigerian Ports Authority revealed that four vessels carrying refined petrol berthed at ports across the country, including Lagos, Warri, Rivers, and Calabar.
Among the major players, AYM Shafa imported 15,000 metric tonnes (21.12 million litres) of petrol into Warri on December 10, while the Kriti Ruby delivered 37,308MT (50.03 million litres) to Lagos on December 12. Two other vessels, St Lady Meenah and Virgo 1, discharged significant volumes in Rivers and Calabar, respectively, reinforcing Nigeria’s reliance on imported petrol despite lofty ambitions of domestic sufficiency.
Imported Fuel Still Cheaper Than Local Supply
Curiously, imported petrol remains cheaper than locally refined fuel. While the landing cost of imported PMS now stands at N900.28 per litre, the product from the Port Harcourt Refining Company is priced at N1,030 per litre. Even petrol refined at the much-touted Dangote Petroleum Refinery costs N970 per litre.
Industry insiders attribute the disparity to dollar-denominated costs for locally refined products, coupled with the high expenses associated with crude oil imports for domestic processing. The downstream sector has repeatedly flagged these challenges, calling for urgent policy interventions.
A Persistent Reliance on Imports
The continued reliance on fuel imports runs contrary to earlier public pronouncements by some marketers, who had pledged to prioritise domestic supply. However, analysts argue that without robust local refining capacity and streamlined regulatory frameworks, such transitions remain aspirational at best.
Oil marketers have taken advantage of the recent dip in costs to bolster supplies, ensuring that domestic demand is met. Yet, the spectre of high retail prices underscores the broader inefficiencies in Nigeria’s energy infrastructure, which remain unresolved despite years of promises and reforms.
The Road Ahead
While the dip in landing costs provides temporary relief, the overall picture remains bleak for ordinary Nigerians grappling with exorbitant fuel prices. The government and private sector must address systemic issues in the oil and gas sector, from refining capacity to foreign exchange allocation, if the nation is to achieve lasting energy security.
For now, the slight reprieve in import costs is a small victory in a protracted battle for affordable and stable energy supply.
