The downstream petroleum sector in Nigeria experienced a slight improvement as the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, declined marginally to ₦970 per litre in December 2024, from ₦971 in November. This minor reduction aligns with a drop in crude oil prices to $73.77 per barrel from $74 recorded last week.
According to the Major Energy Marketers Association of Nigeria (MEMAN), the updated landing cost is based on a foreign exchange rate of ₦1,533.57/$ and crude oil price of $73.91 per barrel (Brent).
In its daily energy bulletin, MEMAN highlighted the significant volatility in international petroleum pricing, attributing it to various geopolitical and economic factors, including:
– Middle Eastern geopolitical tensions.
– Shifting dynamics in China’s market.
– Uncertainty stemming from the recent U.S. elections.
“The foreign exchange rate is also volatile, and the landing cost, influenced by these factors, may fluctuate several times within a day,” MEMAN stated.
Despite the reduction in landing costs, the retail price of petrol in Lagos remains fixed at ₦1,025 per litre.
Ehimen Joseph, Chairman of MEMAN’s Lagos State chapter, noted, “Under a deregulated market regime, the price of petrol is determined by market forces. A price drop is possible but may not be immediate.”
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), emphasized that fuel price reductions are not instantaneous due to existing stock levels.
“Marketers hold large inventories purchased at higher costs. Until these stocks are depleted, prices are unlikely to drop,” Yusuf explained.
He added that reductions depend on sustainable foreign exchange stability and a consistent supply of crude oil.
