The price of Premium Motor Spirit (PMS), commonly referred to as petrol, has risen sharply in Nigeria, with costs now ranging between N1,050 and N1,150/litre depending on location. This spike follows an upward adjustment by the Dangote Petroleum Refinery and several private depot operators, reflecting the rising global crude oil prices.
On Friday, the Dangote Petroleum Refinery announced a price increase for petrol at its loading gantry. The new rates are:
- N955/litre for purchases between 2 million and 4.99 million litres.
- N950/litre for volumes of 5 million litres or more.
This represents a 6.17% increase from the previous N899.50/litre, which had been offered as a holiday discount in December. According to the refinery’s statement, the new price structure took effect immediately, impacting all unsold stock balances.
Impact on Private Depots
Private depots swiftly reacted to the hike, adjusting their prices upwards despite holding old stock. In Lagos, loading costs surged to N970/litre, while in Calabar, prices hit N1,000/litre.
A breakdown of depot price movements includes:
- Sahara Depot: N970/litre, up from N950.
- Pinnacle Depot: N970/litre, up from N921.
- NIPCO Depot: N980/litre, up from N950.
- Rainoil Depot: N970/litre, up from N950.
Retail prices are expected to climb even higher. The Independent Petroleum Marketers Association of Nigeria (IPMAN) projected that petrol might sell for N1,100/litre in Lagos and surrounding states, while in the Federal Capital Territory and remote areas, prices could exceed N1,150/litre.
Drivers of the Hike
Key factors contributing to the price surge include:
- Crude Oil Price Increase: The global price of Brent crude rose to $80 per barrel, significantly impacting domestic production costs.
- Deregulated Market: With the removal of subsidies, petrol prices in Nigeria are now determined by market forces, making them susceptible to fluctuations in global oil prices.
- Logistics Costs: Transportation costs add approximately N50/litre, further increasing prices in hinterlands.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) expressed concerns over the rising costs. While some retailers have managed to maintain prices at N935/litre through agreements with suppliers like MRS Oil, PETROAN President Billy Gillis-Harry noted that additional regulatory charges could push prices above N1,000/litre.
Similarly, IPMAN National Publicity Secretary Chinedu Ukadike stated, “This change is immediate because crude oil prices, too, are immediate… Marketers and consumers are feeling the impact of these fluctuations.”
The current hike in petrol prices highlights the challenges of a deregulated market amidst volatile global crude oil prices. As Nigerians brace for the financial impact, stakeholders urge the government to explore sustainable measures to stabilize the downstream petroleum sector.
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