The Major Energy Marketers Association of Nigeria (MEMAN) has announced a slight reduction in the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, signaling potential price stability in Nigeria’s downstream oil sector. According to MEMAN, the landing cost dropped to N970 per litre in December 2024, down from N971 in November 2024.
This decline coincides with a reduction in global crude oil prices, which fell to $73.77 per barrel from $74 per barrel over the past week. MEMAN disclosed these figures in its daily energy bulletin, attributing the new landing cost to exchange rate adjustments of N1,533.57/$ and a crude oil price of $73.91 per barrel of Brent crude.
Factors Driving Volatility
Despite the marginal drop, MEMAN warned that international petroleum product prices remain highly volatile, citing geopolitical and economic pressures, including instability in the Middle East, fluctuations in the Chinese market, and the ripple effects of the recent U.S. elections.
“International petroleum product pricing is experiencing significant volatility due to geopolitical and economic factors,” MEMAN noted. “The foreign exchange rate is also experiencing instability. As a result, landing costs are likely to fluctuate multiple times daily.”
Retail Prices Remain Stable
Despite the change in landing cost, the retail price of petrol remains stable at N1,025 per litre in Lagos, according to MEMAN officials. The association’s Lagos State Chairman, Ehimen Joseph, emphasized that fuel prices in a deregulated market are dictated by market forces.
“The price of petrol is determined by market forces under a deregulated market regime,” Joseph explained. “A price drop is possible over time, but it depends on various market factors.”
Market Dynamics and Future Outlook
Economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that immediate reductions in petrol prices are unlikely due to existing inventory levels.
“The price of petrol cannot just drop spontaneously, as marketers have large stocks. Until these are sold, reductions will not occur,” Yusuf said. “Over time, however, with sustained foreign exchange stability and changes in crude oil pricing, we may see gradual decreases in fuel prices. This process could take one to two months.”
What’s Next?
Industry experts and stakeholders continue to monitor global market trends and foreign exchange rates, which are critical to shaping the future of fuel pricing in Nigeria. While the current developments offer a glimmer of hope for consumers, the volatile nature of the market underscores the need for cautious optimism.
