The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to ₦922.65 per litre as of Friday.
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This represents a significant reduction of ₦32.35 from the ₦955 per litre offered at the Dangote Petroleum Refinery’s loading gantry.
The landing cost factors in various expenses, including shipping charges, import duties, and fluctuating exchange rates, providing some relief amid the volatile energy market in Nigeria.
The reduction in cost has sparked optimism among oil marketers, with many considering a return to petrol imports.
A major marketer, speaking anonymously, explained that the lower cost of imported petrol could incentivize dealers to explore this route despite ongoing efforts to prioritize local refining.
“The lower cost of imported petrol is often an incentive to dealers, and you can’t blame marketers who choose to import when it’s more viable,” the marketer stated.
Last week, the Dangote Petroleum Refinery attributed the rise in petrol prices to the increasing cost of crude oil, a major component of refined products.
However, the recent decline in landing cost, reflecting the expense of importing and distributing petrol, suggests some relief from the pressures of global market fluctuations and supply chain disruptions.
Brent crude, a benchmark for crude oil pricing, was trading at $78.29 per barrel on Friday, a slight decrease from $78.88 the previous day.
Meanwhile, the naira exchanged at ₦1,550 per dollar, underscoring the continued influence of currency fluctuations on the energy sector.
Despite the reduced landing cost, petrol prices at retail outlets remain high, with major marketers in Abuja selling between ₦990 and ₦1,010 per litre.
Ex-depot prices, which determine wholesale costs, ranged between ₦950 and ₦990 per litre across various locations last week. Depots such as Nipco, Aiteo, and Sahara recorded price reductions, closing the week with prices between ₦960 and ₦970 per litre.
In Port Harcourt, the Bulk Strategic Depot reduced prices from ₦1,005 to ₦981 per litre, while depots in Delta and Calabar maintained prices ranging from ₦972 to ₦990.
In a surprising development, oil marketers imported 76.84 million litres of petrol between January 21 and January 22, 2025.
Data from the Nigerian Port Authority revealed that the imported fuel was handled by vessels berthed at Lagos ports and the Dangote terminal at Lekki Deep Seaport.
This raised questions about the government’s stance on petrol importation, as stakeholders had reportedly agreed to a 180-day moratorium on imports to give the Dangote refinery time to prove its production capacity.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), expressed shock over the importation, stating, “There’s supposed to be a 180-day moratorium on import licenses to allow the Dangote refinery to prove its production capacity.”
However, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), clarified that the moratorium was a mutual understanding and not a binding agreement.
He added, “Anyone who can import at a cheaper rate should be allowed to do so. It’s about affordability and market dynamics.”
Although the reduction in landing costs offers hope for a more profitable environment for importers and marketers, exchange rate fluctuations and high freight costs continue to impact the retail price of petrol.
Industry stakeholders remain optimistic that improved local refining capacities, such as those at the Dangote Refinery, will eventually stabilize the market, reduce reliance on imports, and lower petrol prices for consumers.