Petrol landing cost falls to N1,283.81 but pump prices stay high

The landing cost of imported petrol fell to N1,283.81 per litre from N1,292.88 per litre, according to the Major Energies Marketers Association of Nigeria (MEMAN). The reduction of N9.07 per litre has not yet reached motorists, who still pay between N1,370 and N1,429 per litre in Lagos and Abuja.

Import cost drops

MEMAN’s latest energy bulletin, released on Wednesday, showed the landing cost dropped by about N9 per litre. The fall came even as Brent crude prices edged up to $108.90 per barrel from $108.80 per barrel.

The new landing cost is N66.19, or about 4.90%, below the N1,350 per litre gantry price set by the Dangote Refinery. It is also between N64.19 and N74.19 per litre below the ex-depot prices of N1,348 to N1,358 quoted by depot owners.

Landing cost is an estimate of the expense of bringing imported petrol into Nigeria, including import-related charges. It is not the same as the retail price and does not cover costs after the fuel clears the port.

Pump prices unchanged

At filling stations in Lagos and Abuja, motorists continued to pay between N1,370 and N1,429 per litre. The gap between landing cost and pump price reflects transportation, storage, distribution and retailer margins along the supply chain.

A proposed government relief measure has also not taken effect. Finance Minister Taiwo Oyedele announced on October 8 that petrol would be sold at N1,350 per litre at Nigerian National Petroleum Company (NNPC) Limited filling stations under a planned 30-day discount scheme. NNPC outlets had not started selling at the discounted price as of the time of reporting.

Price outlook

Earlier, NNPC Limited pushed petrol prices to N1,405 per litre at its filling stations, lifting the pump price by N35 from the previous rate of N1,370 per litre. Filling station attendants were informed of the change over the weekend, with the new price taking effect the following day.

The variation across locations shows depot prices have not aligned uniformly with the government’s benchmark. Whether the decline in import costs filters through to retail prices will depend on supply conditions, the cost of moving fuel across the country and pricing decisions at each level of the downstream petroleum market.

For Nigerian businesses and consumers, the landing cost drop offers little relief until it reflects at the pump. The gap between import cost and retail price remains the key pressure point in the downstream market.