In recent news, the cost of landing petrol in Nigeria has dropped significantly. As of November 2024, the landing cost for Premium Motor Spirit (PMS), or petrol, fell to N971 per litre. This is a 20.23% decrease compared to the N1,219 per litre cost recorded in August 2024, according to the Major Energies Marketers Association.

This drop can be traced back to changes in the Naira-Dollar exchange rate and international crude oil prices. By the end of last week, the Naira traded at N1,678.87 per dollar, while Brent crude was priced at $73.63 per barrel. For comparison, in August, Brent crude was $80.72 per barrel, and the Naira’s exchange rate to the dollar was N1,611.

However, even though landing costs have dropped, petrol prices for consumers remain high at the pump. The price per litre ranges from N1,060 to N1,200 at the Nigerian National Petroleum Company Limited (NNPC) stations and other filling stations across the country.

The Dangote Refinery, which recently began fuel distribution, has set its ex-depot prices between N960 and N990 per litre, depending on whether fuel is transported by ship or truck.

Meanwhile, the Nigeria Labour Congress (NLC) has raised concerns, stating that the current pump prices are much higher than the market value, affecting Nigerian consumers who are already facing economic challenges.

While landing costs have dropped, multiple factors influence the final price of fuel at retail outlets. This includes costs related to distribution, taxes, and market regulations, which can impact how quickly (if at all) landing cost reductions translate into consumer savings.

In Nigeria’s case, a volatile exchange rate and global oil price swings continue to complicate pricing. Additionally, the transition to a private sector-led fuel market has introduced changes that could result in temporary pricing mismatches until stability is reached.