Crude prices fell to $65 per barrel due to Trump’s import tariffs and OPEC+ supply increase. Landing cost of petrol dropped to N865, but ex-depot petrol price increased to N900 per liter. There seems to be a contradiction in the Nigerian oil market given the considerable shift in crude prices, spurred by Donald Trump’s tariff policy.
A bulletin by the Major Energies Marketers Association of Nigeria issued on Saturday, showed that the landing cost of petrol dropped from N885 the week before to N865 as of Saturday. While this should typically spell good news for crude-importing Nigeria, ex-depot petrol price saw an increase of N40, going from N860 to N900 per liter in Nigeria’s commercial hub, Lagos. This indicated that the Nigerian oil market refuses to act positively to the drop in global crude prices, as the state-owned oil and gas company, the Nigerian National Petroleum Company (NNPC) Limited, insists on forcing Nigerian refiners to purchase crude in dollars.
To buttress Nigeria’s odd reaction to a positive shift, the Crude Oil Refinery Owners Association of Nigeria (CORAN), has said that there is no reason why Nigeria’s fuel price should not crash below N400
Given that the cost of importing crude has fallen by the equivalent of N15,481.40, the group argued that it should reflect very significantly in the price of petrol, creating a relief that should take gasoline prices from N900 to N400.
Additionally, the organization stated that if crude prices finally drop to $50 per barrel, there is no reason why gasoline shouldn’t be offered for N350 per liter. However, in spite of the decline in the price of oil and the decrease in its landing cost, CORAN warned that petrol prices in the West African country is set to spike.
The group highlighted the relevance of the naira-for-crude initiative, which had been scrapped by the NNPC. Eche Idoko, the Publicity Secretary of the CORAN disclosed that there are still certain individuals who intend to maintain the practice of bringing inferior petroleum products into the nation.
What CORAN said on the Nigeria’s oil market dynamics
According to Idoko’s analysis, the price of locally refined fuel was heading to N700, and thus, some individuals began and continue to kick against the naira-for-crude initiative, which allowed local refineries purchase crude oil from Nigeria in its local currency.
What CORAN said on the Nigeria’s oil market dynamics
The report that the NNPC had forward-sold all of its crude, even though production levels were greater now than when the arrangement started almost six months ago, served as the basis for the decision.
“Forward-sold all its crude” indicates that the Nigerian National Petroleum Company (NNPC) Limited has already sold future petroleum output ahead of schedule, maybe in order to meet contractual commitments, pay off debts, or obtain quick cash.
Nneka Uyam