There is a high tendency for the price of premium motor spirit (PMS) otherwise called petrol to increase above N1,000 as the Nigerian National Petroleum Company (NNPC) Limited admitted to owing suppliers N6 billion debt.
Government officials have recently hinted that maintaining the current official petrol price of N617 per litre may be unsustainable due to the fluctuating exchange rate of the Naira against the dollar.
In recent weeks, long queues have reappeared at independent filling stations in Abuja, Lagos, and other states, where petrol is being sold at around N720 per litre, with some outlets charging as much as N1,000 per litre.
On Monday, the Minister of State for Petroleum, Heineken Lokpobiri, urged the NNPCL to halt the sale of fuel below landing costs, arguing that this would help curb smuggling to neighboring countries.
The Major Energy Marketers Association of Nigeria (MEMAN) recently disclosed that the landing cost of petrol as of July 2024 was N1,117 per litre. The landing costs of AGO (Diesel) and ATK were N1,157 and N1,217 per litre, respectively, for vessels landing in Apapa, Lagos.
An independent oil marketer, speaking anonymously, noted that a rise in pump prices was almost inevitable in a fully deregulated market. The NNPCL remains the main importer, with private importation still limited. Nigeria’s declining crude oil output, which affects the country’s ability to import refined products, further exacerbates the situation, as observed by the Organisation of Petroleum Exporting Countries (OPEC).
A former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ejigbo Depot in Lagos, Mr. Akin Akinade, explained that their members have no direct supply from NNPC and must buy from third-party suppliers at higher costs, which drives up the retail price.
Tunji Oyebanji, Chief Executive Officer of 11 Plc (formerly Mobil Nigeria), speaking to Daily Trust emphasized that selling below cost, whether from imports or local refineries, is unsustainable. He suggested that if petrol were sold at an economic price, more suppliers could enter the market, improving supply and alleviating the financial burden on NNPCL.
“It’s either that, or these supply disruptions will continue indefinitely. I am baffled why they have not been upfront about this from the start instead of offering denials,” he said.
