Nigerian Petrol Prices Drop Below Landing Costs Amid Supply Surge

On September 15, petrol and diesel prices in Nigeria dropped below their current landing costs, despite a rise in global crude oil prices. Brent crude was priced at $108.60 per barrel, while U.S.

West Texas Intermediate crude reached $105.90 per barrel. The estimated landing cost for Premium Motor Spirit (PMS) was N1,420 per litre, and for Automotive Gas Oil (AGO), it was N1,894 per litre.

However, Petroleum Refinery sold PMS at N1,350 per litre, which is N70 below the landing cost, and AGO at N1,850 per litre, N44 below the diesel landing cost. Other depot operators in various regions, including Mainland, Northwest, and Soroman, offered PMS at prices between N1,345 and N1,347 per litre, significantly below the landing cost.

The lower prices were attributed to traders selling stock purchased at earlier, lower prices, creating a distortion in the wholesale market. Additionally, increased supply in regions like Calabar, Port Harcourt, and Warri intensified competition among depot operators, further driving prices down.