The Independent Petroleum Marketers Association of Nigeria has clarified that due to supply and demand dynamics as well as foreign exchange rate depreciation, the eventual renewal of the naira-for-crude agreement between the Nigerian government, the Dangote Refinery, and other refiners was unable to drive down the price of Premium Motor Spirit.
In a conversation with reporters on Tuesday, IPMAN spokesperson Chinedu Ukadike revealed this information.
Ukadike was discussing why, in spite of the decline in global crude oil prices, which on Tuesday morning stood at $65 per barrel and $61 for Brent and WTI crude blends, respectively, Nigerians did not witness a severe fuel price collapse in the local market, according to oilprice.com.
Global crude prices were said to have fallen from about $67 before to the start of the tariff war by US President Donald Trump’s administration.
Trump and China have been tit-for-tat about tariffs that affect international trade, especially crude oil, in recent days.
Crude oil prices have also been declining as a result of the recent agreement on production reduction by the Organization of Petroleum Exporting Countries, or OPEC+.
Global crude prices have, however, noticeably decreased since Trump declared a moratorium in tariffs on all countries, with the exception of China.
Nigerians have bemoaned the fact that local prices have not yet been affected by the worldwide decline in oil prices.
Nurudeen Abdullahi, an Abuja resident, stated that he anticipates local gasoline to cost no more than N850 per liter given the persistence of the naira-for-crude exchange rate and the price of crude on the global market.
“To be fair with you, local petrol prices should be around N850 per litre or less following the current benchmark of crude oil prices, which stood around $65 per barrel, down from $72,” he told newsmen.
Another Nigerian, Evelyn Adebayo, expressed a similar view over expectations of the crash of local fuel prices.
“I believe refiners and marketers are not fair to Nigerians. If it were petrol price hike, they would have implemented it without hesitation.
“But I am surprised that local petrol prices did not drop in a commensurate level as crude prices in the international market,” she stated.
The ex-depot price of gasoline was lowered by N10, according to Dangote Refinery.
Its move to lower ex-depot gasoline prices comes after the Nigerian government implementation committee pledged to keep the Naira-for-crude program in place.
In response, Ukadike defended merchants by claiming that supply and demand factors prevented the local gasoline price from falling as anticipated.
He went on to say that the reason local fuel prices did not plummet could also be due to Nigeria’s foreign exchange rate, which as of Tuesday was N1,604.48 per dollar at the official market.
“The forces of demand and supply in the downstream sector, and the cost of foreign exchange also determine the price of crude and its by-product, fuel.
“The current price of petrol is competitive and fair enough for Nigerians owing to the two factors of forces of demand and supply and FX rate,” he told newsmen.
Nigerians currently buy petrol for between N940 and N975 per litre in Abuja.
