The cost of importing petrol in Nigeria has seen a notable reduction, with the landing cost of Premium Motor Spirit (PMS) dropping to N922.65 per litre as of Friday, January 24, 2025. This represents a significant decrease of N32.35 from the previous price of N955 per litre at the Dangote Petroleum Refinery loading gantry.
The reduction in landing cost, which factors in shipping, import duties, and exchange rates, provides an opportunity for oil marketers to consider returning to importing petrol. The cost decrease could influence the retail price, benefiting consumers while also allowing marketers to explore the more profitable avenue of importing fuel.
A major marketer, speaking anonymously, noted, “The lower cost of imported petrol is often an incentive to dealers and you won’t blame marketers who import the product.” This sentiment reflects the increasing interest in importing cheaper petrol as an alternative to domestic refining.
Although the landing cost of petrol has decreased, the retail price of petrol in Nigeria remains high. Major marketers continue to sell petrol between N990 and N1,010 per litre in the Federal Capital Territory, despite the cost reduction. The average cost for 30 days rose slightly to N939.52 per litre on Friday, up from N929.07 per litre the previous day, reflecting fluctuating global market conditions.
This change in the landing cost coincides with a shift in global market dynamics. The price of Brent crude has decreased to $78.29 per barrel, down from $78.88 per barrel, while the exchange rate is pegged at N1,550 per dollar. These fluctuations are contributing factors to the new cost reductions, which also reflect improved market conditions for importers.
Additionally, oil marketers imported 57,301 metric tonnes of fuel in the two-day period between January 21 and 22, amounting to approximately 76.84 million litres of petrol. Despite an agreement among stakeholders to curb fuel imports and allow the Dangote refinery to prove its capacity, some marketers continue to bring in imported petrol, citing the cost-effectiveness of these supplies.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, expressed surprise at the importation figures, given the industry agreement to limit imports. However, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, clarified that while there is a mutual understanding to limit imports, there is no binding agreement prohibiting it.
This ongoing development highlights the complexities in Nigeria’s oil and gas sector, where global price fluctuations, domestic production capacity, and policy decisions continue to influence the availability and cost of fuel for Nigerian consumers.
