In a surprise move, major oil marketers in Nigeria have adjusted their pump prices, leading to a significant increase in the cost of petrol across the country. The new prices, which came into effect over the weekend, have seen major marketers like 11 Plc (formerly Mobil Oil Nigeria Plc), Conoil, TotalEnergies, MRS, and NNPC Retail Limited set their prices at N619 per liter. Independent marketers, on the other hand, have hiked their prices to as high as N770 per liter.
The sudden increase has left many motorists reeling, with concerns about the financial burden it will place on their budgets. While NNPC Retail Limited has maintained its previous retail price of N568 per liter, with long queues still snaking around their stations, other major marketers have justified the hike as a reflection of the harsh market realities.
According to Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria (MEMAN), the increase is largely driven by the rising cost of foreign exchange rates. While the procurement cost of petrol from NNPC Trading remains stable, other associated costs have skyrocketed. For instance, the cost of ship-to-ship transfers has jumped from $40,000 per day to $70,000 per day.
Furthermore, fees paid to agencies like the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) have increased due to the current exchange rate of N1,560 to $1. Isong noted that the entire downstream value chain relies on the dollar, and as the dollar strengthens, petrol prices rise.
The recent price hikes are also linked to the ongoing fuel scarcity in major parts of the country, particularly in Abuja and Lagos. Private depot owners have raised the ex-depot price of petrol from N630 to N720 per liter, making it challenging for independent marketers to purchase the product.
According to the sun Nigeria, Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized that many filling stations remain closed due to lack of fuel. He urged NNPC, as the sole importer, to clarify the situation to Nigerians.
The recent developments highlight additional challenges faced by independent marketers, including poor road conditions and rising ex-depot prices. With prices reaching N715 per liter compared to previously lower rates, these factors combined with additional margins by marketers have driven up the cost of petrol at the pump.
As stakeholders navigate these challenges, it is crucial to consider the impact on consumers and the broader economy. The recent hikes in petrol prices in Nigeria serve as a stark reminder of the complexities and volatility inherent in global commodity markets.