The recent decline in global crude oil prices could lead to a reduction in the price of premium motor spirit (PMS) in Nigeria. The Major Energies Marketers Association of Nigeria (MEMAN) reported that the estimated import parity of petrol dropped to N922.65 per litre, down from N943.75 just a few days earlier.
MEMAN also highlighted that the price of Brent crude was priced at $78.29 per barrel, falling from $78.88 the day before, with the exchange rate standing at N1,550 per dollar. On Monday morning, the price of Brent crude was further reduced to $78.01 per barrel, marking a decline from over $81 the previous week.
This shift comes only a week after Dangote Refinery raised its ex-depot price by 6.17%, citing the rise in global crude prices as the reason. The price hike saw Dangote’s gantry price jump from N899.50 to N950 per litre, pushing petrol prices at partner filling stations to N970 per litre.
Industry experts have suggested that if crude prices continue to drop, local petrol prices could follow suit. A source noted that just as fuel prices surged with the increase in crude prices, a decrease could now trigger a similar reduction in local prices.
The CEO of the Centre for the Promotion of Private Enterprise also pointed out that with Donald Trump’s presidency potentially boosting crude oil supply, a further reduction in global oil prices is possible, which could lead to cheaper petrol in Nigeria.
With the current price of petrol ranging from N965 to N1,150 per litre, any continued dip in crude prices could force Nigerian refineries and marketers to lower their prices to remain competitive in the deregulated market.