New Fuel Pump Prices Expected at Filling Stations As Crude Oil Prices Crash
- There are changes in the international oil prices, and this could lead to new fuel prices at filling stations nationwide
- The price of fuel is linked to the international crude oil prices, among others, including foreign exchange
- Crude Oil Refinery Owners Association of Nigeria (CORAN) has predicted that a fuel price of around N350 per litre is possible
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The retail cost of fuel at filling stations across Nigeria may likely drop soon as international crude oil prices fall below $60 per barrel.
This latest development will come as a huge relief for Nigerians who are currently paying between N870 and above N900, depending on the location.
Source: Getty Images
Brent crude, the benchmark price for Nigerian crude oil, dropped $2.21, or 3.61%, to $59.08 a barrel on Monday morning.
While US West Texas Intermediate crude was at $56.00 a barrel, down $2.29, or 3.93%.
The fall followed reports that OPEC+ is set to further speed up oil output increase, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
Legit.ng recently reported that about 12 consignments loaded with Nigeria’s crude oil remained unsold as buyers are still being sought.
Petrol pump price to change?
Speaking to Legit.ng, Olatide Jeremiah, CEO of Petroleumprice.ng, said that fuel prices in Nigeria could fall to N800, while diesel could drop to N1000.
He explained:
"Crude oil price decline has a proportional impact on Depot and retail prices in Nigeria, because crude oil amounts to 80% production components of refined products anywhere in the world.
"Nigerians will buy petrol and deisel for N800 and N1000 respectively at pump soon, because crude oil is projected to remain between $60 to $63 throughout 2025.
"The reasons are not far fetched, the trade war between US-China is still impacting negatively, crude demand is dwindling and OPEC output increasing. These factors will keep slumping oil prices."
Also, Clement Isong, Executive Secretary of the Major Energies Marketers Association of Nigeria (MEMAN), explained that while low crude oil prices are bad for the Nigerian government's finances, the benefit is that it would reduce fuel costs for consumers.
A drop in crude oil prices will lead to a gradual reduction in fuel prices.
He said:
"Sustained low crude prices could lead to a gradual reduction in fuel prices at the pump, offering some relief to commuters and transporters."
However, he cautioned that this would depend on the duration of the price downturn and its impact on global markets.
Source: Getty Images
Recently, the Crude Oil Refinery Owners Association of Nigeria (CORAN) said that petrol could fall to as low as N350 per litre at filling stations.
According to CORAN, with crude prices declining sharply, there is no reason Nigerians should continue to pay as high as N900 per litre for petrol.
Eche Idoko, Publicity Secretary of CORAN, explained that the key to achieving a lower petrol price in Nigeria depends heavily on the naira-for-crude initiative, Punch reports.
He noted that petrol prices will continue to remain high if Nigeria relies on imports.
"The price will keep rising due to high FX and logistics costs. Importing refined products adds shipping expenses, and middlemen also take a cut. It is like paying agency fees when renting a house. All these factors push the price up.”
Dangote reduces fuel prices
Earlier, Legit.ng reported that the Dangote Petroleum Refinery announced a reduction in fuel prices following a drop in crude oil prices in April.
Prices were slashed from over N930 per litre to N865, a move that brought relief to millions of Nigerians.
Nigerians will be hoping for a similar gesture, as the Dangote Petroleum Refinery, in its statement, explained its decision to reduce the price.
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Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
