Despite a slight decline in crude oil prices in the international market, petrol prices have continued to rise in Nigeria, with major oil marketers increasing their pump prices to between N1,205 and N1,217 per litre.
The development has renewed concerns over the impact of rising energy costs on households, businesses and the wider economy.
Brent crude, the international benchmark, fell marginally to $88.42 per barrel from $88.60 recorded the previous day.
Similarly, the Organisation of Petroleum Exporting Countries (OPEC) Basket, which includes Nigeria’s Bonny Light, declined to $90.28 per barrel from more than $94 per barrel.
Despite the decline in global crude prices, checks showed that MRS, NNPC and Ardova increased their petrol prices to N1,205 per litre from N1,125.
Mobil also raised its retail price to N1,215 per litre from N1,209, while BOVAS increased its price to N1,217 per litre from N1,210.
12 Depots Record Higher Prices
Meanwhile, 12 petroleum product depots across Lagos, Port Harcourt, Calabar and Warri recorded some of the highest petrol prices in the latest mid-day market report, with prices reaching N1,735 per litre.
The highest prices were recorded in Port Harcourt, where several depots quoted petrol between N1,668 and N1,735 per litre.
Prudent Depot recorded the highest price at N1,735 per litre, followed by Zamson at N1,730. Rain Oil and NEPAS quoted N1,730 and N1,732 respectively.
Other depots with high prices included GulfTreasure at N1,680; Duport at N1,668; IbaChem at N1,668; Ibeto at N1,668; Integrated at N1,670; Menj at N1,670; TMDK at N1,670; and T.Time at N1,668.
The report showed that depot prices in Lagos remained relatively lower, although several major operators also increased their prices.
MRS recorded the highest current depot price in Lagos at N1,207 per litre, up from N1,192.
Pinnacle followed at N1,203 per litre, representing an increase of N17 from N1,186, while NIPCO raised its price to N1,203 from N1,190.
BONO and Pivot increased their prices to N1,203 per litre from N1,195, while African Terminal and Integrated moved from N1,195 to N1,202.
Dangote Refinery quoted petrol at N1,200 per litre, although no previous price was provided for comparison.
The disparity between the coastal markets highlights the influence of logistics, location, supply availability and prevailing market conditions on depot prices.
While petrol prices in Lagos remained largely within the N1,200 to N1,207 per litre range, prices at some Port Harcourt depots were more than N500 higher.
The differences could further affect marketers and retailers sourcing products from higher-priced depots, as depot costs remain a major factor in determining pump prices.
Dangote Refinery Influences Market
An energy analyst who spoke on condition of anonymity attributed the current market movement partly to the dominant position of Dangote Petroleum Refinery in Nigeria’s downstream sector.
According to the analyst, the 700,000-barrel-per-day refinery currently accounts for a significant share of domestic petrol supply, making its pricing decisions influential across the market.
The analyst said the global crude market had remained volatile but argued that recent international prices alone did not fully explain the movement in domestic petroleum product prices.
Dangote Refinery recently increased its gantry price of petrol by N15 per litre, from N1,185 to N1,200, effective yesterday.
However, a downstream operator with the Major Energies Marketers Association of Nigeria (MEMAN) said petrol prices could begin to decline gradually as marketers recover losses incurred during previous periods of price volatility.
The operator said marketers had suffered significant losses over the past 18 months because of frequent changes in petroleum product prices.
According to him, losses can occur throughout the supply chain when prices fall because marketers may still have products purchased at higher prices in their inventories.
He explained that marketers often reduce prices gradually in such circumstances to recover part of the losses.
He added that when prices rise, marketers immediately reflect the increased cost in their Enterprise Resource Planning systems, which affects the valuation of their existing stock before sales commence.
According to the operator, the process is reversed when prices decline.
He maintained that such pricing adjustments were part of normal trading practices and that Dangote Refinery could only work to keep its costs low rather than absorb the losses of other marketers.
Experts Reject Return to Fuel Subsidy
Former Managing Director and Chief Executive Officer of 11 Plc, Adetunji Oyebanji, urged the Federal and state governments to introduce targeted measures to cushion Nigerians from the impact of higher petrol prices.
Rather than returning to petrol subsidy, Oyebanji recommended interventions in public transportation, healthcare and education.
He suggested that government could subsidise public transport systems, including Bus Rapid Transit (BRT), to reduce fares and ease the burden on households.
He warned that a return to fuel subsidy would place a significant financial burden on government, particularly given the sharp increase in petrol prices compared with previous subsidy levels.
Oyebanji also called for greater accountability in the management of increased government revenues, saying higher allocations to federal and state governments should translate into improved welfare for citizens.
He advocated increased investment in public services, direct cash transfers and reductions in government charges for essential services.
He also noted that fluctuations in international crude prices, particularly amid uncertainty around the Gulf region, could affect petroleum product prices globally.
Dangote Raises Concern Over Petrol Imports
Meanwhile, Dangote Petroleum Refinery and Petrochemicals has raised concerns over the continued issuance of licences for the importation of petroleum products despite the availability of significant domestic refining capacity.
The refinery said it remained committed to ensuring energy security and maintaining uninterrupted petrol supply across Nigeria but expressed concern that the volume of imported petrol entering the country was creating uncertainty in domestic demand forecasting and inventory management.
According to market data cited by the refinery, imported petrol accounted for approximately 43 per cent of total PMS supplied into the Nigerian market in July.
The refinery questioned the need for continued large-scale petrol imports when domestic refining capacity is available to meet the country’s requirements.
Since commencing operations, the refinery said it had maintained sufficient inventories and reserved product volumes to support uninterrupted supply.
It said this had required substantial investment in storage, logistics and working capital.
However, the company said the lack of transparency over the volume of imported petrol expected to enter the Nigerian market had made production and inventory planning increasingly difficult.
According to the refinery, maintaining large inventories without sufficient information about future imports creates additional storage and financing costs.
It said excess products that could not be immediately absorbed by the domestic market would have to be exported to regional and international markets.
Dangote Refinery explained that the increase in its export volumes in recent months was not due to an inability to meet domestic demand, but rather a response to excess inventory arising from uncertainty in the local market.
The company said continued imports were effectively placing locally refined petrol in competition with imported products despite the availability of sufficient domestic refining capacity.
Dangote Refinery reiterated its readiness to meet and exceed Nigeria’s petroleum product requirements and said it would continue investing in reliable fuel supply and energy security.
