Reports indicate that the pump price of petrol is likely to experience another round of increases, marking the third increase in just 10 weeks. Oil marketers have revealed that the landing cost of petrol has surged by 37.4% month-on-month to N632.17 per liter in July 2023, up from N460 per liter in June 2023.
This rise in the landing cost does not even include additional expenses such as depot-related charges, transportation logistics, and marketers’ margins, which could result in the pump price reaching nearly N700 per liter.
Oil marketers have cited several factors contributing to the increase in landing costs. These include ongoing foreign exchange scarcity and deterioration, a significant depreciation of the Naira, and the recent upward movement in international crude oil prices.
The transactional analysis of a major operator highlighted the mounting costs, revealing that marketers were paying N604.14 per liter in total direct costs.
Due to these developments, it’s deemed unprofitable for many to import petrol at the current pump price. The Nigerian National Petroleum Company Limited (NNPCL) remains the primary importer, with minimal private importation recorded recently.
Additionally, Nigeria’s crude oil output has declined, which could further limit the nation’s capacity to import refined products.
While the high crude oil prices may provide additional revenue to the government, they also drive up fuel prices.
The Managing Director of a major operator emphasized the instability in the downstream sector and called for President Bola Tinubu’s intervention in managing the nation’s foreign exchange to stabilize the market.
Despite these challenges, it’s expected that gasoline imports will continue due to steady demand from Europe and other West African regions. However, prices are likely to remain high, impacting consumers and importers alike.
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