In a sign of stability in Nigeria’s downstream energy sector, the Major Energy Marketers Association of Nigeria (MEMAN) has reported a slight drop in the landing cost of Premium Motor Spirit (PMS), also known as petrol, in December 2024.
The latest figures show a decrease to N970 per litre, down from N971 per litre in November 2024. This drop coincides with a modest reduction in global crude oil prices, which fell to $73.77 per barrel from $74 per barrel last week.
MEMAN’s daily energy bulletin, obtained by Vanguard, indicated that the reduction in landing cost was based on a foreign exchange rate of N1,533.57 per dollar and a crude oil price of $73.91 per barrel of Brent.
Despite this decline, the bulletin emphasized that international petroleum product pricing remains highly volatile, influenced by a range of geopolitical and economic factors.
Among these factors are ongoing tensions in the Middle East, fluctuations in the Chinese market, and the potential impact of the recent U.S. elections.
MEMAN also highlighted the unpredictable nature of the foreign exchange rate, which is another critical element in determining landing costs.
As such, the association warned that the landing cost of petrol could change multiple times within a single day, depending on shifts in these variables.
While the landing cost has decreased, the retail price of petrol in Lagos has remained unchanged at N1,025 per litre. This reflects the continued stability in domestic petrol prices despite the fluctuations in global markets.
According to Ehimen Joseph, Chairman of the Lagos State Chapter of MEMAN, petrol prices are largely determined by market forces in Nigeria’s deregulated fuel market.
“A drop in price is possible,” he remarked, acknowledging that shifts in market conditions could eventually lead to a reduction in the retail price.
However, experts caution that such price drops will not happen immediately. Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), explained that a sudden drop in petrol prices is unlikely due to the large stockpiles held by marketers.
“The price of petrol cannot just drop spontaneously,” he stated. “Until the existing stock is depleted, there will be no reduction in price.”
Dr. Yusuf noted that any reduction in retail petrol prices would be gradual, tied to broader market forces and foreign exchange fluctuations.
“The market will definitely have a lag, which will be sustained within a month or two, pending the depletion of marketers’ stocks and the stabilization of foreign exchange rates,” he added.
The slight drop in the landing cost of petrol provides a glimmer of hope for consumers, suggesting that price reductions may be possible over time.
However, for now, the retail price remains steady, with the broader market awaiting further developments in the international and domestic economic landscape.
