Oil marketers have disclosed that the landing cost of Premium Motor Spirit (PMS), also known as petrol, has decreased to N922.65 per litre as of Friday. This cost takes into account various expenses, including shipping, import duties, and exchange rates. The reduced landing cost is expected to influence the price at which petrol is sold to consumers and may encourage marketers to return to petrol imports.
The new landing cost is significantly lower than the N955 per litre offered at the loading gantry of the Dangote Petroleum Refinery. This decrease of N32.35 may lead to increased competition in the market, potentially benefiting consumers. A major marketer, who spoke on condition of anonymity, noted that the lower cost of imported petrol is often an incentive to dealers.
The Dangote Petroleum Refinery had attributed the recent rise in petrol price to an increase in the cost of crude oil. However, the latest decline in landing cost signals some relief from global market fluctuations and supply chain challenges. Despite this reduction, the retail price of petrol in Nigeria remains high, with major marketers selling refined products between N990 and N1,010 per litre in the Federal Capital Territory.
According to the latest data released by the Major Energies Marketers Association of Nigeria, the on-spot estimated import parity into tanks was N922.65 per litre, a reduction of N21 or 2.2 per cent from the previous day’s quote. The document also noted that the price of Brent crude was benchmarked at $78.29 per barrel, down from $78.88 per barrel the previous day, with an exchange rate of N1,550 per dollar.
The reduced landing cost is viewed as an improvement for importers, providing private depot owners and independent marketers with an alternative route to profitability. With the average ex-depot price across all locations ranging from N950 to N990 per litre, importers stand a chance to cover costs significantly lower than recent historical averages and generate sustainable margins.
The updated landing costs and aligned ex-depot pricing indicate a more profitable environment for stakeholders in the downstream oil and gas sector. However, it also highlights the ongoing influence of exchange rate fluctuations and freight costs on Nigeria’s energy market.
Further analysis of petrol price movements at loading depots for last week showed that the loading cost of the commodity was reduced by N10. Some marketers, such as Aiteo, reduced their prices, selling their product at N970 from N965 per litre earlier in the week.
Other marketers, including Sahara, Swift, Wosbab, and AA Rano, also adjusted their prices, with some reducing their prices by up to N20. Port-Harcourt, Bulk Strategic Depot, reduced its price by N24, closing at N981.
The developments in the oil market are expected to continue, with marketers and consumers alike watching closely to see how the reduced landing cost will impact petrol prices in the coming days.
