Petrol Increases by N88, Filling Stations Set To Adjust Pump Prices

• Oil marketers are looking into importing more petroleum products following Dangote Refinery’s suspension of naira sales
• The rising cost of landing the petroleum products has led to suggestions that the pump prices could hit N1,000 per litre
• Marketers have warned against government intervention, stressing that deregulation is necessary for market stability

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.

The pump price of Premium Motor Spirit (PMS), commonly known as petrol, may rise in the coming days as the landing cost of imported fuel has increased by N88.

The increase in imported petrol comes as Dangote Refinery suspended sales of petroleum products in naira, citing the federal government’s reluctance to continue the naira-for-crude deal.

The policy shift by Dangote refinery has disrupted petrol supply, forcing marketers to turn to imports.

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A meeting scheduled for Monday between the Technical Sub-Committee on the Naira-for-Crude Policy, Dangote Refinery, and government officials was postponed, a source familiar with the committee's workings told Reuters.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has yet to present options on the naira-for-crude deal, delaying further negotiations.

Petrol landing cost increases

New data from the Major Energies Marketers Association of Nigeria (MEMAN) on Wednesday, March 27, indicated that the landing cost of imported petrol rose to N885 per litre

This is an increase of N88 in one week, when compared to N797 previously.

The price increase has sparked speculation that imported petrol could soon retail at N1,000 per litre, as additional charges and margins are factored in.

Currently, Dangote Refinery’s ex-depot price stands at N815 per litre, N70 lower than the new landing cost of imported fuel.

MEMAN said in a statement:

“The transition from price control to deregulation has met resistance, but price adjustments are inevitable in a free market.”

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Dangote refinery exports fuel to US, more countries ready to buy

Following Dangote’s decision to halt naira sales, some fuel retailers began stockpiling petrol, anticipating price hikes.

Depot owners also raised prices, with private depots in Lagos increasing loading costs to about N900 per litre from under N850 before the announcement.

Nigeria’s fuel import volumes increased.

Punch reports that seven vessels carrying 154.22 million litres of petrol arrived at the country’s ports between March 17 and 23, according to a document from the Nigerian Ports Authority.

The shipments were offloaded at Tincan Port, Lekki Deep Seaport, and Calabar Port.

The document also revealed that Dangote Refinery imported 654,766 metric tonnes of crude oil in the same period.

Marketers threaten to sell in dollars

Earlier, Legit.ng reported that the Independent Petroleum Marketers Association of Nigeria (IPMAN) has threatened to begin the sale of petrol in dollars if the Dangote Refinery starts selling its products in foreign currency.

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New pump prices expected as cost of fuel increase by N20

According to IPMAN, the move was in response to worries that denominating transactions in dollars could pressure the naira, causing inflation and affecting energy security.

The development has led energy policy experts to ask Nigerians to brace up for higher petroleum product prices.

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

Source: Legit.ng