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Marketers Keep High Petrol Prices Despite Crude Oil Crash
🇳🇬 Nigeria /Economy & Trade

Marketers Keep High Petrol Prices Despite Crude Oil Crash

From Vanguard · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Nigerian oil marketers are maintaining high petrol prices despite a significant drop in global crude oil prices.
  • Brent crude has fallen to around $72.48 per barrel, down from nearly $120 per barrel during the US-Iran conflict.
  • Consumers continue to face high costs as filling stations largely keep prices at levels set during the period of soaring crude prices.

Despite a sharp decline in global crude oil prices to pre-war levels, oil marketers across Nigeria are continuing to sell Premium Motor Spirit (PMS), commonly known as petrol, at elevated prices. This practice leaves consumers burdened with high transportation and energy costs, creating a disconnect between international market trends and domestic retail prices.

Brent crude, the international benchmark for Nigeria's oil, recently fell to approximately $72.48 per barrel on Thursday. This is a substantial drop from its peak of nearly $120 per barrel during the height of the US-Iran conflict, a period that had fueled expectations of subsequent reductions in petrol prices. However, checks in Abuja reveal that most filling stations have retained the pump prices introduced when crude oil was significantly more expensive.

For instance, on Thursday, the Nigerian National Petroleum Company Limited (NNPC Ltd.) sold petrol at N1,260 per litre in Abuja. Other major retailers like TotalEnergies, Conoil, AA Rano, and AYM Shafa also maintained prices above N1,200 per litre, with MRS outlets offering the lowest price surveyed at N1,240 per litre. Similar pricing strategies are being observed in Lagos, where retailers are also keeping old rates despite the global price drop.

This situation persists even after a recent reduction in ex-depot prices by the Dangote Petroleum Refinery, which supplies a substantial portion of the country's petrol. The refinery had cut its ex-gantry price by N75 per litre, or six percent, to N1,175 per litre following a decline in crude oil prices to about $82.78 per barrel. However, no further reductions have been announced despite crude prices falling by an additional $10 per barrel since then. Industry analysts suggest that while sustained declines in crude oil prices should translate to lower ex-depot and retail prices, marketers often prioritize maximizing profits, leading to the current consumer burden.

It is not always straightforward with marketers who seek to maximise profits at every situation.

— Henry AdigunIndustry analyst Henry Adigun of AHA Consultancy commented on the pricing strategies of oil marketers.
DistantNews Editorial

Originally published by Vanguard in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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