- The landing cost of imported petrol surged by N88 in just one week, raising concerns that pump prices could soon rise to N1,000 per litre
- The increase followed the suspension of the Dangote Refinery’s naira-for-crude deal, forcing the refinery to adjust its pricing to global standards
- The Federal Government’s reluctance to resolve the dispute left the fuel market in uncertainty, with local marketers grappling with higher importation costs
The price of Premium Motor Spirit (PMS), commonly known as petrol, may soon rise further as the landing cost of imported fuel has surged.
This increase follows a significant uptick in the importation of petrol, compounded by the ongoing suspension of the sale of petroleum products in naira by the Dangote Refinery, due to a dispute with the Federal Government over the naira-for-crude deal.
According to reports, the price of imported petrol is set to reflect this rise in costs in the coming days, with the landing cost per litre jumping by N88 in just one week.
This increase raises concerns about an imminent hike in pump prices, which could affect consumers across the country.
Data from the Major Energies Marketers Association of Nigeria (MEMAN) indicated that the landing cost of a litre of petrol has risen from N797 last week to N885 this week.
This sharp increase could potentially see the price of petrol at filling stations soar to as high as N1,000 per litre once additional charges and margins are factored in.
For context, the cost of importing petrol had previously dropped to an average of N860 per litre in recent weeks, following aggressive price cuts by the Dangote refinery, which had been selling petrol below the market price.
The rising cost of imported petrol is linked to a number of factors, including the suspension of the naira-for-crude deal by the Dangote Refinery. The refinery had been selling petrol to local marketers in naira, but this arrangement has now been suspended after the Nigerian government allegedly refused to continue the deal.
The Dangote refinery's decision to halt naira-based transactions has led to a spike in petrol prices at private depots in Lagos, with the cost of loading petrol jumping to approximately N900 per litre.
Implications of the suspension of naira-for-crude deal
The naira-for-crude policy had been instrumental in keeping fuel prices relatively stable, as it allowed the Dangote refinery to purchase crude oil in naira and sell refined products in the same currency.
However, with the suspension of this agreement, the Dangote refinery has now aligned its pricing with the global market, where transactions are typically conducted in US dollars.
This shift has left local marketers scrambling to adjust to the new pricing structure, which has already led to an uptick in fuel prices.
The Federal Government’s reluctance to resolve the deadlock over the naira-for-crude deal has left many in the industry concerned about the future of fuel prices.
The refinery’s decision to halt naira transactions has had immediate effects on fuel imports, with reports indicating that several vessels carrying imported petrol are expected to arrive at Nigerian ports in the coming weeks.
IPMAN urges Nigerians to avoid panic buying, assures sufficient fuel
Meanwhile, TheRadar earlier reported that the Independent Petroleum Marketers Association of Nigeria (IPMAN) advised Nigerians not to engage in panic buying, assuring that the country has an adequate fuel supply.
Mr Ukadike Chinedu, the Publicity Secretary of IPMAN, disclosed this statement on Sunday, December 23, in Abuja.
