The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, in Nigeria experienced a significant decrease, dropping to N900.28 per litre. This represents a N36 reduction from the previous week’s cost of N936.75 per litre, marking a 3.62% decline. This downward trend follows a period of fluctuating costs, with the landing cost earlier in the week reported at N890.43 per litre. The landing cost, which encompasses the expenses associated with importing and distributing petrol, offers a glimpse into the dynamics of global market forces and supply chain intricacies. Despite this reduction, however, the retail price of petrol in Nigeria remains fixed at N1,060, highlighting the disparity between import costs and consumer prices.
The decrease in landing cost can be attributed to several factors, including fluctuations in global crude oil prices and foreign exchange rates. These two elements play a pivotal role in determining the cost of refined petroleum products, encompassing petrol, diesel, aviation fuel, and kerosene. Industry experts have pointed to the dollar charges levied on locally refined petrol, alongside the cost of importing crude oil, as key contributors to the high price of domestically produced petrol. This observation sheds light on the complexities of domestic refining and its impact on the overall cost structure of the petroleum market in Nigeria.
A comparative analysis of locally refined and imported petrol reveals a surprising discrepancy. The price of petrol produced by the Dangote Petroleum Refinery was reported at N970 per litre, while petrol from the Port Harcourt Refining Company was priced at N1,030 per litre. This contrasts with the lower landing cost of imported fuel, which, excluding regulatory fees, falls below the cost of domestically refined products. This price difference raises questions about the cost-effectiveness of domestic refining and the factors contributing to higher production costs. The importation of petrol persists despite earlier declarations by some marketers to prioritize domestic supply, further highlighting the complexities of the market dynamics.
Detailed analysis of market data reveals further insights into the fluctuating cost of petrol. The daily spot price of estimated import parity into tank costs stood at N900.28, up from N890 the previous day, while the 30-day average price decreased to N945.23 from N946.38. This data, coupled with Brent crude oil prices at $73.52 per barrel and an exchange rate of N1,533 per dollar, paints a picture of a volatile market susceptible to both global and local influences. The ex-depot price range in Lagos remained within the N970 to N1,050 band, reflecting the interplay of these various factors.
Capitalizing on the reduced landing cost, oil marketers imported a substantial 121.1 million litres of petrol within a three-day period. This influx of imported fuel, transported in four vessels, arrived at various ports across Nigeria, including Apapa Port in Lagos, Warri Ports, Onne Port in Rivers State, and Calabar Port in Cross Rivers State. This strategic importation underscores the marketers’ efforts to leverage favorable market conditions to bolster domestic supply. The details of these shipments, including vessel names, arrival times, quantities, and handling agents, provide a granular view of the logistical operations involved in importing petrol.
The import activities were spearheaded by various marketers, including AYM Shafa, who imported 21.12 million litres of petrol. Other significant imports included 50.03 million litres arriving at Apapa port and 30.84 million litres at Rivers port. These imports, meticulously documented by the Nigerian Port Authority, showcase the coordinated efforts of multiple stakeholders within the petroleum supply chain. The continued reliance on imported petrol, despite pronouncements about prioritizing domestic refining, underscores the ongoing challenges and complexities facing Nigeria’s petroleum sector. The balance between domestic production and imports remains a critical area of focus for ensuring a stable and affordable supply of petrol for the Nigerian market.
