HARDSHIP: Petrol Price Sets to Hit N1,300 Per Litre

The price of premium motor spirit (PMS), commonly known as petrol, in Nigeria is expected to rise to N1,300 per litre due to a severe cash crunch impacting the Nigerian National Petroleum Company (NNPC) Limited.

Although the NNPC, the only entity currently importing petrol into Nigeria, has denied subsidizing PMS, it has also not disclosed the exact landing cost of the fuel. The company recently acknowledged it is under financial pressure from the high costs associated with supplying PMS.

The landing cost of petrol—which includes international prices, shipping, insurance, and other fees—has surged from N720 per litre in October 2023 to N1,203 per litre. If the NNPC stops subsidizing petrol, the price is expected to increase further, likely ranging between N1,300 and N1,350 per litre, according to market sources.

An independent oil marketer, who chose to remain anonymous, told BusinessDay that “It was almost inevitable for the pump price to remain the same, as this is one of the outcomes of a fully deregulated market. The NNPCL remains the main importer, with private importation remaining limited. This situation is worsened by Nigeria’s declining crude oil output, which impacts the country’s capacity to import refined products.”

Tunji Oyebanji, the CEO of 11 Plc (formerly Mobil Nigeria), emphasized that selling petrol below its landing cost, whether from imports or local refineries, is unsustainable. He stated, “If they sell at an economic price, perhaps others can import, supply will improve, and the financial strain will not be on them alone. It’s either that or these supply disruptions will continue indefinitely. I am baffled that they have not been upfront about this since instead of denials.”

Additional findings reveal that the current landing cost of N1,203 does not cover several other charges, including those from the Nigerian Ports Authority, vessel fees, and the Nigerian Maritime Administration and Safety Agency. With some of these costs denominated in dollars, experts are calling for a review to reduce the overall cost of petrol.

Gillis Harry, the national president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said that with the current landing costs, Nigerians should not expect any imminent reduction in petrol prices. He highlighted the need for domestic refineries to be operational and efficient to help ease some of the financial burdens on the NNPC.

“As we speak, there is nowhere in the world PMS can be landed at less than $1. You know what that will be in naira due to the exchange rate. And with this, there is no way we can sustain selling this product below N1,200,” Harry explained.

Abubakar Maigandi, president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), mentioned that the NNPC’s financial troubles should not necessarily affect the country’s fuel supply if other marketers were allowed to import refined products. He said the association is in discussions with the government about permitting its members to import petrol, which could help address the shortage.

“We are telling Nigerians that there is no need for panic. As marketers, we have petrol for sale, but not in the quantity that we should have. Our stock is a bit down, but some marketers are still selling,” Maigandi assured.

Despite these assurances, many filling stations in Abuja and Lagos remain closed, forcing long lines at the few that are still operating. In parts of Lagos, such as Ikeja, Maryland, and Ikorodu, petrol prices have soared to as high as N1,000 per litre, exacerbating the situation. This trend is also observed in Ogun State and Abuja, the nation’s capital, as the fuel crisis deepens.