The cost of landing Premium Motor Spirit, commonly known as petrol, in Nigeria has decreased significantly, dropping by 20.34% to N971.57 per litre over the past three months. However, this reduction has not translated into relief for consumers as retail petrol prices have surged by N443 per litre since August, rising from N617 per litre to N1,060 per litre as of early November 2024.
This trend has raised questions among Nigerians, who are grappling with high fuel costs despite the reported decrease in landing expenses. The Major Energies Marketers Association’s daily energy bulletin provided data showing that in August, oil marketers imported petrol at N1,219 per litre when Brent crude oil was priced at $80.72 per barrel, and the exchange rate was N1,611 per dollar. During that period, the pump price stood at N617 per litre.
By November, landing costs had decreased to N971.57 per litre, coinciding with a drop in Brent crude prices to $75.57 per barrel and a new exchange rate of N1,665.84 per dollar. Despite the reduced landing costs, consumers are paying more, with petrol priced at N1,060 per litre at Nigerian National Petroleum Company Limited (NNPCL) stations and as high as N1,180 per litre at independent filling stations.
Experts believe various factors are responsible for this situation, including the ongoing deregulation of the fuel market, exchange rate volatility, rising inflation, and broader economic challenges.
“The reduction in landing costs should ideally reflect in retail prices. But exchange rate pressures and deregulation are complicating the pass-through effect to consumers,” a market analyst noted.
The Nigeria Labour Congress (NLC) has voiced strong concerns about the rising fuel prices and their impact on the public. In a statement released after its National Executive Council meeting on Sunday, the NLC accused fuel marketers of inflating prices far beyond market value.
“Nigerians are being exploited, and the pump prices do not match the true cost of the product,” the NLC stated, emphasizing that many citizens are enduring severe hardship due to high fuel prices, compounded by government policies they argue are pushing people further into poverty.
The NLC’s warning highlights the urgency of addressing the economic strain faced by Nigerians.
“We call on the government and fuel marketers to act in the interest of the citizens,” the labour group urged, stressing its commitment to holding stakeholders accountable for the welfare of the people.