Nigeria still sells the cheapest petrol in West Africa despite import cost surge

The cost of importing petrol into Nigeria has jumped more than 15 per cent in two weeks, driven by rising geopolitical tensions in the Middle East. Despite this, Nigeria continues to sell the cheapest petrol in West Africa, with an average pump price of about N1,156 per litre.

Import costs spike on Middle East tensions

Data from the Major Energies Marketers Association of Nigeria (MEMAN) shows that the spot landing cost of Premium Motor Spirit (PMS) imported through the ASPM route rose from N983.92 per litre on June 24 to N1,135.73 per litre by July 9. That is an increase of N151.81, or approximately 15.4 per cent. The NPSC (NOJ) import route recorded a similar jump, from N982.92 per litre to N1,134.72 per litre.

MEMAN attributed the increase to renewed tensions in the Middle East, particularly around the Strait of Hormuz, one of the world's most critical oil shipping routes. The association noted that fears of supply disruptions have already begun to affect Nigeria's fuel import costs and even led to temporary closures of some filling stations as marketers and consumers reacted to the uncertainty.

Short-term spike, longer-term decline

While spot costs rose sharply, the 30-day average import parity price for petrol actually declined. It dropped from N1,138.20 per litre on June 24 to N1,064.42 per litre by July 9, a fall of about 6.5 per cent. This suggests the recent spike is a short-term reaction to geopolitical uncertainty, while the monthly average still reflects calmer market conditions from earlier in the period.

The increase was not limited to petrol. Diesel (AGO) spot import parity rose from N1,213.44 per litre to N1,383.10 per litre, about 14 per cent growth. Aviation turbine kerosene (ATK), or jet fuel, climbed from N1,201.23 per litre to N1,359.67 per litre, an increase of approximately 13.2 per cent. MEMAN said jet fuel had already shown signs of price pressure before the latest surge spread to petrol and diesel.

Naira weakness adds to import bill

The report attributed the higher import costs to a combination of rising global crude prices and the depreciation of the naira. Brent crude averaged $73.71 per barrel during the week ending July 9, while Nigeria's Bonny Light crude averaged $71.63 per barrel. The naira weakened slightly, averaging N1,373.47 per dollar, compared with N1,367.26 per dollar two weeks earlier. Since refined petroleum products are purchased in US dollars, any depreciation of the local currency automatically raises Nigeria's import bill.

Nigeria still cheapest in the region

Despite the rising import costs, Nigeria maintains the lowest average petrol pump price among West African countries. MEMAN surveyed twelve countries in the region. Nigeria's average retail price of about N1,156 per litre was the least expensive. Countries such as Liberia, the Benin Republic, Togo, Ghana, Cameroon, Côte d'Ivoire, Mali, Senegal and Sierra Leone all recorded significantly higher pump prices. Sierra Leone topped the list at N2,311.63 per litre, nearly double Nigeria's average.

Experts warn that if the situation in the Middle East worsens, Nigerians could face significant increases in transportation costs and inflation, further complicating the economic landscape. For now, Nigerian motorists continue to benefit from comparatively lower pump prices, even as marketers closely monitor global oil market developments.