Hope Rises for Cheaper Fuel As Global Oil Prices Fall to Lowest Level Since August
- Global crude oil prices fell sharply after US President Donald Trump said the war involving Iran was effectively over
- Petrol prices in Lagos and Abuja remain as high as N1,420 per litre despite the decline in international crude costs
- The FCCPC warned that refiners and marketers must pass on any sustained decline in crude prices to Nigerian consumers
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Global crude oil prices have fallen below $90 per barrel following comments by US President Donald Trump that the conflict involving Iran is "effectively over", raising hopes that petrol prices in Nigeria could ease in the coming weeks.
Brent crude, the international benchmark, fell nearly 3% to $89.66 per barrel on Tuesday morning, November 11.
Source: Getty Images
The drop came a day after prices shed almost 6% as investors responded positively to signs that the Middle East conflict could be winding down.
Trump also played down the likelihood of further military strikes against Iran, easing market concerns about prolonged disruptions to global oil supplies.
The Federal Competition and Consumer Protection Commission (FCCPC) has responded to the development by warning Nigerian fuel refiners and marketers that they can no longer justify keeping petrol and diesel prices high if international crude costs continue to fall.
FCCPC demands lower prices at the pump
FCCPC Executive Vice Chairman and Chief Executive Officer Tunji Bello spoke in Abuja, responding to public concern over fuel prices that have remained stubbornly high even as global crude costs moderate.
He noted that Brent crude futures had climbed to around $115 per barrel in September before sliding below $90 this week.
Despite that decline, petrol prices across major Nigerian cities have not moved. Motorists in Abuja are currently paying between N1,405 and N1,420 per litre, while prices in Lagos range from N1,325 to N1,370 per litre.
Those figures are significantly higher than the N839 per litre in Lagos and N925 per litre in Abuja recorded on February 27, the day before the conflict involving the United States, Israel and Iran broke out.
Petroleum marketers have largely blamed the spike in domestic fuel prices over the past eight months on crude price volatility and disruptions to shipping through the Strait of Hormuz, a waterway that handles at least 25% of global oil traffic.
Source: Getty Images
FCCPC issues direct warning to refiners
Bello said that if the decline in crude prices holds, marketers and refiners will have no basis for keeping pump prices elevated.
"If the decline in crude prices is sustained, there is no justification for refiners and marketers to continue to keep petrol and diesel prices relatively high. We expect easing in wholesale petrol costs and for the resulting savings to reach consumers at the pump without undue delay," he said.
He added that the FCCPC would work alongside the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other relevant agencies to monitor wholesale and retail pricing.
Source: Legit.ng
