The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to N981 per litre, according to data released by the Major Energies Marketers Association of Nigeria (MOMAN).
This marks a decrease of over N140 from the previous cost of around N1,130 per litre recorded in recent weeks.
The reduction in the landing cost is attributed to the recent fall in global crude oil prices. Brent crude, the international benchmark for oil, has been trading between $70 and $75 per barrel throughout September 2024. On Thursday, September 26, Brent was priced at $71.41 per barrel, down from $73.46 the previous day.
Crude oil prices and foreign exchange rates are key determinants of the cost of refined petroleum products in Nigeria, including petrol, diesel, aviation fuel, and kerosene. In August 2024, Brent crude averaged $80.36 per barrel, according to data from Statista, a global statistical firm. The price reduction has been linked to decreased oil demand from China and expectations of increased production by the Organisation of Petroleum Exporting Countries (OPEC).
Despite the drop in landing costs, pump prices of petrol across Nigeria remain high. However, major oil marketers have resumed the importation of PMS, a task previously dominated by the Nigerian National Petroleum Company Limited (NNPCL). The Dangote Petroleum Refinery has also begun production and distribution of petrol, which is expected to affect market dynamics in the near future.
This development provides some relief in the ongoing conversation around fuel prices in Nigeria, as lower crude prices may signal reduced costs for consumers in the coming months. However, market volatility and fluctuating foreign exchange rates remain challenges for the country’s energy sector.
