Economy

Petrol Landing Cost Reaches N1,117/litre in Nigeria, Marketers Report

Written by Jerry Alomatu on July 18, 2024

News Views: 52

As of Tuesday, July 16, 2024, the Major Energies Marketers Association of Nigeria (MEMAN) revealed during a webinar that the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, stands at N1,117 per litre. This announcement comes amidst ongoing concerns over the disparity between landing costs and retail prices in the country.

MEMAN also disclosed that the landing cost for diesel is N1,157/litre, and for aviation fuel, it is N1,127/litre. These figures underscore the significant cost pressures faced by energy distributors in Nigeria.

Currently, filling stations operated by the Nigerian National Petroleum Company Limited and major marketers are selling PMS at prices ranging from N617 to N660 per litre. Independent marketers, on the other hand, are charging N700 or more per litre.

Despite these revelations, NNPC, the sole importer of petrol into Nigeria, has consistently denied subsidizing the cost of PMS and has refrained from disclosing its own landing cost figures.

MEMAN’s Executive Secretary, Clement Isong, emphasized that these cost figures were sourced from independent energy price benchmark providers and pledged to provide regular updates to ensure transparency.

Recent allegations by independent oil marketers have accused private depot owners of increasing the ex-depot price of petrol from N630 to N720 per litre, adding to concerns over rising fuel costs.

Experts in the energy sector, such as Prof. Wumi Iledare from an interview with a correspondent, highlighted the substantial gap between diesel and petrol prices in Nigeria compared to global standards. He suggested that some form of absorption of costs, whether through under-recovery or subsidy, is likely occurring, given the current market dynamics and exchange rates.

Prof. Adeola Adenikinju, a renowned economist and President of the Nigerian Economics Society, echoed this sentiment, stating that the government continues to subsidize petrol prices despite recent calls from international bodies like the International Monetary Fund (IMF) to remove such subsidies. The IMF warned that these subsidies could consume three percent of Nigeria’s Gross Domestic Product (GDP) in 2024.

The Federal Government, however, has staunchly denied any ongoing subsidy on petrol prices, contrasting with claims made by industry experts and organizations like MEMAN regarding the actual costs involved.