KEY POINTS
- Â Lifting and distribution cost reduce as naira gains strength against the dollar; Brent crude prices also decline.
- In another categories; Diesel and aviation fuel landing costs are also slashed.
- NNPC pledges market related pricing as it bargains with Dangote refinery.
The pump price of petrol fell slightly within the week from ₦981 per litre it was sold on September 25, 2024, to ₦945.63 per litre, on September 27, depending on the rate of the dollar to the naira. MEMAN announced on Monday the index revealed that the higher value of the naira and declining international value of crude was partly culpable for the reduction in petrol landing costs.
While the exchange rate to the dollar has significantly changed from a few days ago, on the 27 of September, the rate was ₦1,586.26 per dollar compared to ₦1,667.22 two days ago.  Also, the Brent crude, the international reference, declined from $73.67 per barrel in the prior MEMAN report to $72.45 and that boosted the reduction in the petrol landing cost.
Decreased fuel expenses and shifts in market
The report also disclosed decline of the other types of fuel landing cost. The landing cost of diesel reduced to ₦1,068.04 per litre down from ₦1,089/Litre while the price of aviation fuel reduce from ₦ 1,117.34/litre to ₦ 1,079.79/litre. It also showed that average ex-depot prices of PMS had been mildly lower by major marketers in Lagos, Calabar, and Port Harcourt.
The disparity between imported petrol and Dangote-produced petrol was said to be about ₦46 per litre when compared to the NNPC estimated price of ₦898 per litre of Dangote fuel.Nevertheless, NNPC has since taken advantage of such price volatility to adjust pump prices to about ₦855–₦ 900 per litre after the commissioning of the Dangote refinery’s home-produced petrol.
 Market induced bargaining powers and geographical location
According to the NNPC spokesperson Olufemi Soneye the price of petrol hit an alarming high level of ₦1,019 per litre in Borno and other parts of Northern Nigeria while in Abuja, Sokoto and Kano it was slightly low standing at ₦999.22 per litre. However, prices recorded for products in Lagos were slightly cheaper at ₦950 per litre.
 During a media appearance, Segun Dapo, NNPC’s Executive Vice President for Downstream, said that petrol pricing was still market-led even though a deal had been signed with the Dangote refinery. From our interview with Segun, he explained that talks with Dangote group on pricing lasted over one week as both camps tended to make offers and counter offers.
 According to The Punch ‘In the end, we agreed on how much one can buy Dangote PMS for while underlining the group’s willingness to only transport Dangote’s fuel that is cheaper than imported products,’ Segun said. While the Dangote refinery insists to supply petrol to NNPC at record low prices, many Nigerians expect that the domestic crude sales starting from October 1, 2024 will help bring down petrol prices.
