Relief may be on the horizon for Nigerian motorists as falling crude oil prices and a stabilizing naira suggest a potential drop in Premium Motor Spirit (PMS) costs. Hobnob News reports on the market dynamics that could lead to cheaper petrol.
The price of crude oil has dipped to a 12-week low, with Brent futures settling at $71.62 a barrel and West Texas Intermediate crude at $68.37. This decline is attributed to reports that OPEC+ will proceed with a planned oil output increase in April.
In Nigeria, the downstream oil sector is closely monitoring these developments, as crude oil prices and exchange rates are key determinants of refined petroleum product costs. Recent price reductions by the Dangote refinery and the Nigerian National Petroleum Company Limited (NNPC) have already sparked a price war, with ex-depot PMS prices falling to N825 per liter.
Economist Paul Alaje believes that further price reductions are sustainable, suggesting that petrol prices could fall below N700 per liter. “It is sustainable to reduce petrol prices to N700 based on today’s reality of the exchange rate,” Alaje stated. “The challenge we may have is a global crisis that makes the price of crude oil go up. But for now, we are seeing relative stability.”
Alaje’s computations indicate that PMS prices should currently range from N795 to N820 per liter. However, he cautioned that a global crisis could disrupt the market.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, emphasized that petrol prices will continue to fluctuate based on foreign exchange rates and international crude oil prices.
The current crude oil prices are below the $74 per barrel projected by the Federal Government in the 2025 budget, offering the prospect of more affordable fuel for Nigerians. As the market evolves, Hobnob News will continue to provide updates on petrol price trends.
