Petrol prices across Nigeria have remained high despite a significant decline in global crude oil prices, which fell to $73 per barrel on Wednesday—the lowest level recorded since the outbreak of the United States-Iran conflict in February.
Data from Oilprice.com showed that crude oil prices dropped from $76.75 per barrel on Tuesday to $73.50 on Wednesday, extending the downward trend that began after the United States and Iran reached a peace agreement.
Despite the sharp fall in crude prices, petrol pump prices have not reflected the change. As of Wednesday, many filling stations continued to sell petrol at approximately ₦1,205 per litre, a figure many consumers argue does not align with current international oil market realities.
Following the decline in crude oil prices from a peak of about $120 per barrel during the US-Iran tensions to roughly $73 after the June 14 peace accord, many Nigerians anticipated that petrol prices would fall below ₦1,000 per litre. However, that expectation has yet to be met.
Recently, Dangote Refinery reduced its ex-depot petrol price by ₦75 per litre, bringing it down from ₦1,250 to ₦1,175 per litre. The move also prompted fuel importers to lower their prices.
DIP CONNECTS recalls that Dangote Refinery had earlier increased its gantry price from ₦774 to ₦874 per litre following the escalation of the Middle East crisis. During the same period, crude oil prices rose from below $70 per barrel to about $84 per barrel amid military tensions involving the United States, Iran, Israel, and other countries. Retail fuel prices consequently surged from around ₦830 per litre to more than ₦1,300 per litre.
With crude oil now trading at approximately $73.69 per barrel, industry stakeholders believe petrol prices should decline from the current level of over ₦1,200 per litre.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged refiners, depot operators, and fuel importers to review their pricing structures and reduce both ex-depot and retail pump prices to reflect the drop in international crude oil prices.
PETROAN National President, Billy Gillis-Harry, stated that the reduction in global crude prices offers an opportunity for operators in the downstream petroleum sector to transfer the benefits of lower production costs to consumers.
In a statement issued by PETROAN’s National Public Relations Officer, Dr. Joseph Obele, Gillis-Harry stressed that prevailing market conditions should be reflected in fuel pricing.
“The recent decline in global crude oil prices presents an opportunity for stakeholders in the downstream petroleum sector to pass the benefits of lower crude oil costs to Nigerian consumers. Market realities should be reflected in both ex-depot and retail pump prices in the interest of fairness and economic relief for the public,” he said.
Gillis-Harry also expressed concern about current domestic pricing patterns, noting that in some cases, the landing cost of imported petroleum products appears lower than prices offered by local refiners.
“In some instances, the landing cost of imported petroleum products appears to be lower than the prices offered by domestic refiners. This development is surprising and underscores the need for a more competitive downstream petroleum market that guarantees consumers access to the most affordable products available,” he added.
However, an official of Dangote Refinery, who spoke anonymously to DIP CONNECTS, maintained that no fuel importer was currently selling petrol at a lower price than the refinery. According to the source, the refinery is still processing relatively expensive crude oil purchased during the period of heightened geopolitical tensions.
Industry observers believe many importers are waiting for Dangote Refinery to make another price adjustment before implementing further reductions.
Oil prices had surged during the conflict amid fears that shipping operations through the Strait of Hormuz could be disrupted. In recent days, however, prices have fallen as traders became more confident that the US-Iran agreement would help keep the strategic route open. Reports of a modest increase in shipping activity have also contributed to market optimism.
According to CNN, traders remain focused on monitoring vessel movement through the Strait of Hormuz and assessing whether tensions in the Middle East will remain under control.
Meanwhile, United States President Donald Trump stated on Tuesday that a record 19 million barrels of oil passed through the Strait of Hormuz on Monday. He attributed the decline in oil prices to the uninterrupted flow of crude through the vital waterway.
“19 million barrels of oil flowed out of the Hormuz Strait yesterday, an all-time record. Oil prices are tumbling down, and the world is a much safer place,” Trump said in a post on his social media platforms.
ADEOLA KUNLE
No comments:
Post a Comment