N650/Litre: Analyst Predicts NNPC, Dangote Crashing Petrol Price Again as Crude Oil Cost Declines
- Crude oil prices are falling, but the value of the naira against the dollar remains stable on the global exchange market
- This comes amid rumours that OPEC+ will proceed with its planned oil production hike in April
- According to analysts, the price war between Dangote Refinery and NNPC Limited could lead to a reduction in prices
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
While the naira remains stable against the dollar in the international currency market, crude oil prices are on the decline.
Source: Getty Images
Amid speculations that OPEC+ will move forward with a planned increase in oil supply in April, oil prices dropped roughly 2% to a 12-week low this week.
United States West Texas Intermediate crude dropped $1.39, or 2%, to close at $68.37, while Brent futures dropped $1.19, or 1.6%, to settle at $71.62 a barrel.
Channels TV reported that WTI and Brent closed at their lowest levels since December 9 and December 6, respectively.
According to reports, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, have agreed to move on with their April oil output rise.
Nigerians, however, expect that the decline in crude oil prices will be reflected in fuel prices, to influence more reduction in prices.
In addition, they implied that the price war between the NNPC and Dangote refinery may cause the price to drop to between N650 and N800 per litre.
Financial analyst and Chief Economist at SPM Professionals, Paul Alaje, in a Channels Television interview, said that the coexistence of Dangote Refinery and NNPCL in their current form benefits Nigerians.
He said:
“We, in fact, want more of the competition to go on because this is the consequence of deregulation. I should be buying fuel between N650, N750, and N800 per litre. But if any of them fizzles out, be ready to buy at over N1000 per litre again."
Naira declines
Meanwhile, in the parallel market, the value of the Naira increased from N1,515 to N1,512 per dollar on Tuesday to N1,512 on Wednesday.
Source: Getty Images
But on the Nigerian Foreign Exchange Market (NFEM), the value of the Naira dropped to N1,505 per dollar.
According to data released by the Central Bank of Nigeria (CBN), the naira depreciated by N3 on Tuesday, February 5th, as the indicative exchange rate increased to N1,505 per dollar from N1,502 per dollar on Tuesday.
As a result, the difference between the NFEM rate and the parallel market dropped from N13 to N7 per dollar on Tuesday.
Dangote to refund Nigerians buying fuel at higher prices
Legit.ng earlier reported that Dangote Refinery announced it would refund customers who purchased Premium Motor Spirit (PMS), also known as petrol, at rates higher than its advertised prices from key distributors, following its recent price reduction.
The company stated that the refund applies to fuel purchased from its partners, including Ardova Plc, Heyden, and MRS filling stations throughout Nigeria.
Dangote refinery recently reduced its ex-depot price for petrol from N890 per litre to N825 per litre.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
