Petrol Price Increases Drastically as Marketers Raise Pump Prices

The price of petrol in Nigeria is moving closer to N1,500 per litre after several marketers increased their pump prices despite a decline in international crude oil prices.

In Lagos and surrounding areas, the retail price of Premium Motor Spirit (PMS) rose from about N1,205 to N1,310 per litre, while some other filling stations adjusted their prices to N1,315 and above, with some reportedly charging more than N1,400 per litre.

The latest increase came as international crude prices moved downward, with the price of crude falling from about $92 per barrel to around $87.31 per barrel.

The contrasting movements have raised questions about the factors determining petrol prices in Nigeria, as domestic market conditions increasingly influence the cost of the product.

Data from the Daily Depot Price Intelligence Report showed that petrol depot prices also remained high across major locations on Friday, August 28.

Warri recorded the highest reported depot price at N1,217 per litre, followed by Port Harcourt at N1,214, Calabar at N1,204 and Lagos at N1,202.

Mainland and Soroman depots in Calabar recorded the lowest reported price at N1,203 per litre.

In Warri, Liquid Bulk sold petrol at N1,215 per litre, while Masters recorded N1,210, Matrix N1,217, Sigmund N1,215 and T.S.L N1,215.

In Lagos, Aiteo and Dangote depots were both listed at N1,200 per litre.

The figures suggest that domestic petrol prices are no longer directly following movements in international crude oil prices. Factors such as local refining costs, product supply, logistics, exchange rates, storage charges and financing expenses are playing a growing role.

Although crude oil remains an important component of petroleum pricing, a fall in the international benchmark does not necessarily result in an immediate reduction in the price paid by Nigerian consumers.

Other costs affecting the final price include refining margins, import parity, freight and marine charges, depot expenses, taxes and the level of competition among suppliers.

The market is also being influenced by the increasing supply of locally refined petroleum products, which are competing with imported products.

On the international market, Brent crude was reported at $88.10 per barrel after falling by 0.47 per cent, while West Texas Intermediate declined by 0.16 per cent to $83.40.

Other crude benchmarks recorded different movements, with Murban crude rising by 4.04 per cent to $95.75 per barrel. The OPEC Basket increased by 1.06 per cent to $87.31, while the Indian Basket rose by 1.53 per cent to $89.52.

The continued rise in domestic petrol prices could put additional pressure on households and businesses if depot prices remain elevated.

Higher pump prices could increase transportation and logistics costs, which may in turn affect the prices of food and other goods and add to inflationary pressure.

However, increased competition among local refiners and petroleum suppliers could help moderate prices if more sources of petrol become available.

The latest price movement indicates that Nigeria’s petrol market is increasingly being driven by domestic supply, refining capacity, distribution costs and market conditions rather than international crude prices alone.