New Pump Prices Expected As Cost of Fuel Increase by N20

• An energy expert has warned that fuel prices in Nigeria could increase to N930 per litre over the naira-for-crude sales
• The impasse between the federal government and the Dangote Refinery had already led to an increase in ex-depot prices for fuel
• The situation could worsen following Dangote's decision to suspend the sale of petrol in naira temporarily

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Petroleum marketers have said that petrol prices at the pump in Nigeria could rise to at least N930 per litre across the country.

The prediction followed another increase in the ex-depot price of petroleum products by private depots.

Companies like Pinnacle, AIPEC, Rainoil Lagos, and WOSBAB reported this latest price adjustment.

BusinessDay reports that the ex-depot price of petrol stood at an average of N870 per litre on Monday, an increment of more than N20 in one week.

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New fuel prices expected

Jide Pratt, chief operating officer of AIONA, commented on the potential retail prices, stating:

“For premium motor spirit (PMS), it is about N10 to N20 as some sell N880 for probably old stock

"Ideally, another N25 added to these prices will be the pump price."

Zarma Mustapha, the deputy president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), also highlighted the regional variations in costs involved in distributing petroleum products.

He explained:

"You have additional costs to factor into your margin, which vary depending on your location. For instance, in Abuja, the transportation cost per litre is approximately N45.

If you purchase at N870 and add N45 for transport, the landing cost in Abuja becomes N915. Adding a margin of N15 to N20 brings the final price to around N930 to N935. That’s essentially how the pricing dynamics work."

The impending price hike comes amidst ongoing negotiations between NNPC and Dangote Refinery regarding the extension of their naira-for-crude sales agreement, set to expire this month.

Read also

New fuel prices: Marketers prepare ahead as Dangote stops sale of petrol in naira

Since October 2024, this arrangement has facilitated the sale of approximately 40 million litres of crude in naira, with Dangote Refinery subsequently selling petrol and diesel domestically in the local currency.

Billy Gillis-Harry, national president of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has advocated for the continuation of this arrangement, emphasising its positive impact on petrol prices and national inflation.

He stated:

"Our position remains that we advise the government against ending the experiment too soon. The naira-for-crude sales should continue for at least another six months to assess its impact."

Petrol station owners seek help

Earlier, Legit.ng reported that petrol station owners called on the federal government to keep fuel prices stable for six months.

The marketers said that current price instability was affecting their business and creating market uncertainty.

PETROAN also expressed concern over significant financial losses incurred by marketers due to sudden petrol price revisions.

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng