The price of Premium Motor Spirit (petrol) could drop to as low as N900 per litre in the coming days if the proposed peace agreement between the United States and Iran is finalised and global crude oil prices continue to fall, according to industry experts.
Recent developments in the Middle East have led to a sustained decline in global oil prices, raising hopes that fuel prices at the pump may also decrease. After reaching over $120 per barrel in April, crude oil prices fell to about $87 per barrel as of Sunday. This continued decline, alongside plans to reopen the Strait of Hormuz, has sparked cautious optimism among fuel marketers that prices of petrol, diesel, and aviation fuel may ease soon.
Crude oil, the main raw material for fuel production, surged from below $70 per barrel after the US-Iran conflict erupted on February 28. During more than three months of hostilities, crude traded above $100, sometimes exceeding $120 per barrel, causing a sharp increase in fuel prices worldwide.
In Nigeria, petrol prices rose from about N830 per litre to N1,300 per litre. Diesel and aviation fuel prices also soared, with airlines warning that the rising costs could affect their operations.
With crude prices now declining, speculation is growing that Dangote Petroleum Refinery may further reduce petrol prices to reflect current market conditions. The refinery recently cut its gantry price of petrol to N1,250 per litre from N1,275, and diesel to N1,700 per litre from N1,800, following a drop in crude prices below $100 per barrel on May 30.
At the current crude price of $87 per barrel, a source within the Dangote refinery told our correspondent that a further reduction in the gantry price would normally be expected. However, the refinery still holds a considerable stock of crude acquired at higher prices. The source, who spoke on condition of anonymity, said petrol could sell for as low as N900 per litre if crude oil prices continue to drop. Yes, N900/litre petrol is possible if oil prices remain low, but we still have expensive crude stock in our tanks, the source told The PUNCH.
