In a sign of stability in Nigeria’s downstream sector, the Major Energy Marketers Association of Nigeria (MEMAN) has reported a slight decline in the landing cost of Premium Motor Spirit (PMS), also known as petrol, which fell to N970 per litre in December 2024, down from N971 per litre in November 2024.
This reduction comes amidst a corresponding dip in global crude oil prices, which decreased to $73.77 per barrel from $74 per barrel just a week ago. According to MEMAN’s daily energy bulletin, the latest landing cost is calculated based on an exchange rate of N1,533.57 to the dollar and a crude oil price of $73.91 per barrel (Brent).
However, MEMAN cautioned that international petroleum product pricing is subject to significant volatility due to various geopolitical and economic factors, including developments in the Middle East, shifting market dynamics in China, and the outcomes of recent U.S. elections. Furthermore, fluctuations in the foreign exchange market continue to impact the price of petroleum products. These elements, the association noted, are expected to cause intra-day changes in the landing cost.
Despite this drop in landing cost, the retail price of petrol in Lagos remains unchanged at N1,025 per litre.
Ehimen Joseph, Chairman of the Lagos State Chapter of MEMAN, emphasized that petrol pricing is determined by market forces within the deregulated market regime, noting that a reduction in price is certainly possible.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), echoed this view, stating that while a spontaneous drop in fuel prices is unlikely due to marketers holding large stocks, a price reduction may occur over time. He highlighted that the lag in price reduction is expected to persist for one to two months, until existing stocks are depleted and the foreign exchange rate stabilizes.
As the market adjusts to these changing dynamics, consumers may see future price adjustments depending on the evolving interplay of global and local economic factors.
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