Petrol prices expected to drop in Nigeria following global oil price decline

Prices of Premium motor spirit (PMS), also called petrol, in Nigeria are set to decrease as global crude oil costs ease amid Middle East ceasefire developments.

The Independent Petroleum Marketers Association of Nigeria has assured consumers that escalated petrol prices will cool off following a drop in global crude oil prices.

The price relief comes after a ceasefire agreement between Israel and Iran, advanced by US President Donald Trump, helped ease global oil market tensions.

After twelve days of price surges that saw Brent crude and West Texas Intermediate futures climb to around $79 and $76 per barrel respectively, both benchmarks had fallen to $68.14 and $65.38 per barrel by Wednesday morning.

The previous oil price surge has prompted widespread increases across Nigeria’s petroleum supply chain.

Dangote Refinery raised its petrol ex-depot price from N825 to N880 per litre, while its retail partner MRS filling stations hiked pump prices to between N925-N945 per litre in Lagos and Abuja, up from N875-N895.

Major retailers including NNPC, NIPCO, Ranoil, AA Rano, Empire Energy, and Eterna responded by increasing their Abuja outlet prices to between N945-N975 per litre during the twelve-day price spike.

Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, explained that domestic petrol prices will naturally decline as global oil costs fall.

“As the global oil prices go down, the domestic price of petrol would also go down. This is because the cost of production would reduce. The same with the exchange rate at the foreign exchange market. The price of petrol would inadvertently drop,” Ukadike noted.

Ukadike also emphasized that price fluctuations are inherent features of a deregulated oil downstream sector and urged the Nigerian government to establish an energy bank. This facility would provide petroleum sector stakeholders with access to credits that could serve as buffers during market disruptions.

The development offers hope to Nigerian consumers who have endured good fuel cost increases over the past two weeks, with relief potentially coming as global oil market stability returns.