Petrol Hits ₦935 Per Litre Amid Supply Constraints
Fuel prices in Lagos surged over the weekend, with motorists now paying between ₦925 and ₦935 per litre at the pump. This sharp increase follows rising landing costs, disruptions in naira-based transactions at Dangote Refinery, and delays in finalizing Nigeria’s "naira-for-crude" policy.
Just last Monday, the landing cost of petrol soared from ₦797 to ₦843.28 per litre, reflecting a ₦46 per litre hike in just two weeks. Some major fuel stations, including TotalEnergies and MRS, adjusted their pump prices accordingly, selling at ₦935 and ₦925 per litre, respectively.
According to the Major Energy Marketers Association of Nigeria (MEMAN), several global and local factors have contributed to this price surge.
1. Global Oil Price Volatility
The rise in fuel costs isn't just a local issue—it’s tied to international market trends. Europe is currently transitioning from winter-grade to summer-grade petrol, which typically trades at a premium. This shift, combined with global supply constraints, has driven up the price of refined petroleum.
Adding to the challenge, stock levels at the Amsterdam-Rotterdam-Antwerp (ARA) oil hub—one of the world’s most significant petroleum storage and trading centers—have hit a 12-week low. Many refineries are undergoing seasonal maintenance, further tightening supply. A recent fire at Italy’s Falconara refinery has also worsened market conditions, adding to price instability.
2. Exchange Rate and Import Costs
Although the foreign exchange rate has remained relatively stable, fuel importers still face high costs due to logistics expenses, financing charges, and regulatory fees. The current financing rate for import transactions stands at a hefty 32% per annum, further pushing up the final pump price.
MEMAN suggests that strategic cost-saving measures could help ease the financial burden on marketers and consumers alike. Some potential solutions include:
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Negotiating Better FX Rates: Securing more favorable exchange rates for petroleum imports.
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Optimizing Logistics: Eliminating Ship-to-Ship (STS) transfers where possible and opting for larger cargo shipments to reduce per-unit costs.
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Regulatory Efficiency: Reviewing charges from agencies like the Nigerian Ports Authority (NPA), NIMASA, and NMDPRA, which contribute to the final landing cost.
What’s Next for Fuel Prices in Nigeria?
Given the current global market dynamics and domestic regulatory uncertainties, fuel prices are expected to remain volatile. Experts warn that petrol landing costs could fluctuate multiple times within a single day, depending on forex movements, supply chain disruptions, and international crude oil prices.
For now, consumers and businesses must brace for higher fuel expenses, while policymakers and industry players explore long-term solutions to stabilize prices and ensure affordable energy access.