Petrol Landing Costs Drop 20%, Yet Pump Prices Surge, Raising Concerns of Price Inflation

The cost of importing Premium Motor Spirit (PMS), commonly known as petrol, into Nigeria has fallen by 20.34% in recent months, now estimated at N971.57 per litre, signaling potential relief in global oil market fluctuations and supply chain costs. However, despite the significant decrease in landing costs, the retail price of petrol in Nigeria has soared, jumping by N443 or 71.79%—from N617 per litre in August 2024 to N1,060 by November 8, 2024.

Data from the Major Energies Marketers Association revealed that in August, when the Brent crude benchmark was $80.72 per barrel and the exchange rate was N1,611 per dollar, marketers imported petrol at N1,219 per litre. Yet, it retailed at N617 per litre during that period. By November, while the landing cost had dropped to N971.57 per litre with Brent crude at $75.57 and an exchange rate of N1,665.84 per dollar, pump prices had skyrocketed to N1,060 at Nigerian National Petroleum Company (NNPC) stations and N1,180 at independent outlets.

The data further showed landing costs of N945.63 in September and N903.64 in October, yet retail prices did not reflect these reductions. Experts attribute the disconnect between declining landing costs and rising pump prices to factors such as the deregulated fuel market, exchange rate volatility, high inflation, and broader economic challenges.

In response to this surge, the Nigeria Labour Congress (NLC) accused fuel marketers of unjustly inflating prices, arguing that retail costs far exceed market value. In a communique from its National Executive Council meeting, the NLC alleged that these pricing practices and government policies were exacerbating hardship for Nigerians, many of whom are now grappling with intensified poverty and hunger.

The NLC expressed its commitment to holding both fuel marketers and the government accountable, underscoring concerns over the economic strain on citizens and the need for fair pricing that reflects actual market conditions.