Nigerian Fuel Crisis: Marketers Reveal Soaring Costs Landing cost of petrol in Nigeria surges to N1,117/litre, MEMAN discloses

The landing cost of Premium Motor Spirit (PMS), commonly referred to as petrol, reached an alarming N1,117 per litre as of Tuesday, July 16, 2024, according to an announcement by the Major Energies Marketers Association of Nigeria (MEMAN) on Wednesday.

In a webinar with journalists, MEMAN also disclosed the landing costs for diesel and aviation fuel, pegged at N1,157/litre and N1,127/litre, respectively.

Currently, petrol stations operated by the Nigerian National Petroleum Company Limited (NNPC) and major marketers retail PMS at prices ranging from N617 to N660 per litre, while independent marketers sell at N700 per litre or more.

Despite NNPC’s role as the sole importer of petrol into Nigeria, the company has repeatedly denied subsidising PMS costs and has refused to reveal the landing cost of the product.

This disclosure by MEMAN marks one of the first instances where marketers have shed light on the previously concealed landing costs of PMS. Clement Isong, MEMAN’s Executive Secretary, stated that the figures were sourced from independent energy price benchmark providers and pledged regular updates to keep the public informed.

Independent oil marketers have recently accused private depot owners of increasing the ex-depot price of petrol from N630 to N720 per litre. Energy sector expert Prof Wumi Iledare pointed out that the significant discrepancy between diesel and petrol prices in Nigeria suggests underlying issues.

“The gap between the cost of diesel and petrol in Nigeria is significant. It is not this pronounced globally. This indicates a problem,” Iledare said. He speculated that some entity is absorbing the cost difference, whether termed as under-recovery or subsidy, as the current petrol price does not reflect true market costs.

Echoing this sentiment, Adeola Adenikinju, a Professor of Economics at the University of Ibadan and President of the Nigerian Economics Society, remarked that the government is subsidising the current PMS price by purchasing at higher rates and selling at lower ones.

The International Monetary Fund (IMF) recently cautioned Nigeria against implicit fuel and electricity subsidies, warning that such subsidies could consume three per cent of the nation’s Gross Domestic Product in 2024, up from one per cent the previous year.

President Bola Tinubu announced the removal of fuel subsidies during his inauguration on May 29, 2023. Nevertheless, the IMF noted that due to inadequate compensatory measures and corruption concerns, implicit subsidies were reintroduced by the end of 2023 to help Nigerians cope with inflation and currency depreciation. Despite this, the NNPC and the Federal Government continue to deny any current subsidy on PMS.