In the last three months, the cost to import petrol (also known as Premium Motor Spirit) to Nigeria has dropped significantly—by about 20.34%. As of now, the estimated cost of bringing petrol to Nigeria is N971.57 per litre. This decrease is good news, as it suggests that global market prices and supply chains have improved.
However, even though it has become cheaper to import petrol, the selling price for consumers in Nigeria has gone up sharply. Since August 1, 2024, the price of petrol at the pump has surged by N443, which is an increase of 71.79%, rising from N617 per litre to N1,060 per litre by November 8, 2024.
According to the Major Energies Marketers Association, which tracks fuel prices, petrol was imported in August at a cost of N1,219 per litre when the price of crude oil was $80.72 per barrel, and the exchange rate was N1,611 for every dollar. During that time, the selling price was much lower at N617 per litre.
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Fast forward to November, despite the landing cost now being significantly lower at N971.57, the price of crude oil has also decreased to $75.57 per barrel, and the exchange rate has risen to N1,665.84 per dollar. Despite these changes, petrol is being sold for N1,060 at the Nigerian National Petroleum Company (NNPC) pumps and N1,180 at independent stations.
Looking closer at past months, the landing cost for petrol was N945.63 in September and N903.64 per litre in October. It’s surprising that, despite the lower costs for importing petrol, the retail prices have continued to rise. Several factors contribute to this situation, including:
- Ongoing changes in the fuel market (referred to as deregulation), which allow for fluctuating prices.
- Changes in the exchange rate.
- Rising inflation rates.
- Broader economic issues that Nigeria is facing.
Some experts believe that the decrease in landing costs may eventually lead to lower retail prices for petrol, but this has not yet happened.
The Nigeria Labour Congress (NLC), a major labor organization, recently expressed concern about fuel marketers. They accused them of raising petrol prices too high, claiming that the prices consumers are paying exceed the actual costs in the market. In a statement following a meeting, the NLC stated that many Nigerians are struggling due to these high prices and the government’s economic policies, which they believe are pushing people into poverty. The NLC is calling for accountability from both the fuel marketers and the government to improve the situation for Nigerians having a hard time.
