Nigeria is bracing for a third consecutive increase in petrol pump prices following the government’s decision to remove subsidies on fuel. The surge in global crude oil prices and the devaluation of the Naira have led to an alarming situation in the country.
According to reports, the Platt benchmark price for petroleum products hit an astonishing $979.75 per metric ton (MT) at the end of yesterday’s trading session. When considering regular premium operational fees of $50, the average cost per MT of fuel could reach a staggering $1,025.75.
In addition to the Platt benchmark, the Argus benchmark price trading platform has reported prices of $960.86/MT and $1,010.86, inclusive of premium operational costs.
Using the standard volume conversion rate of 1,341 liters per metric ton, the benchmark dollar cost translates to a range between $0.7538 to $0.7649 cents per liter. As a result, the average landing cost per liter is projected to be between N655.06 and N669.29.
Insider sources, who wish to remain anonymous, have revealed that upcoming fuel imports into the country could trigger a minimum increase of N100 or more due to the surge in global crude oil prices.
The anticipated price increase could push pump prices to range between N660 and N700 per liter.
Moreover, industry players are now responsible for transporting petroleum products to retail dispensing points, incurring average costs of N3 to N9 for distribution within Lagos and N14 to N45 to other parts of the country.
As a consequence of this shift, retail pump prices in Lagos are projected to range between N658.06 and N664.06, depending on the purchase price, which falls within N655.06 and N672.29 to N678.29, depending on the purchase price, falling within N669.29.
Meanwhile, other regions in Nigeria may experience pump prices ranging from N669.09 to N700.06 on a lower landing cost purchase price, and as high as N683.29 and N714.29 on a higher landing cost purchase price.
Suppliers and marketers are facing significant challenges in meeting demand while grappling with exchange rates of between N869 and N875 per US dollar. Traders are expressing concerns over the current market volatility and are hesitant towards petroleum product importation, as the market remains non-cost-reflective despite subsidy removal.
Nigerian consumers should brace for further petrol price increases before the year’s end. The implications of these fluctuations could have substantial effects on the country’s economy and the daily lives of its citizens.
With projections of crude oil prices reaching $85 per barrel by year-end and the instability of the Naira against the Dollar, Nigeria may witness further hikes in petrol pump prices in the coming months.
