Hopes for a reduction in fuel prices have been dashed as the Federal Government increased the landing cost of imported Premium Motor Spirit (PMS), also known as petrol. The latest figures from the Nigerian National Petroleum Company Limited (NNPCL) indicate that the landing cost has risen by 4%, from N919.55 per litre in September to N956.13 per litre in October 2024.
The surge in landing costs is driven by the weakening performance of the naira against the US dollar. In October, the exchange rate averaged N1,650/$, compared to N1,625/$ in September.
Breakdown of the New Landing Cost
Data obtained from NNPCL’s pricing template reveals that the direct cost of PMS consists of the following:
- Product cost: N887.45 per litre
- Freight charges (from Lome to Lagos): N10.37
- Port charges: N7.37
- Levy (by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA): N4.47
- Storage costs: N2.58
These components bring the direct cost of PMS to N913.12 per litre. When finance costs such as letters of credit (N16.53) and interest (N43.01) are added, the total landing cost reaches N956.13 per litre.
Petrol Prices at Filling Stations
Furthermore, The rising landing costs have already impacted the petrol pump prices at filling stations. Major marketers, including NNPCL stations, are now selling petrol at prices above N1,000 per litre. Independent marketers are charging between N1,100 and N1,300 per litre, depending on the location.
This price increase further heightens concerns about the inflationary pressures facing Nigerian consumers, as petrol prices continue to soar in response to foreign exchange challenges and rising landing costs.
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