The price of Premium Motor Spirit (PMS), commonly known as petrol, may continue to drop as global crude oil prices decline, and the naira maintains its stability against the dollar.
Oil prices fell to a 12-week low this week, with the Brent crude dropping by 1.6 percent to settle at $71.62 per barrel, while the United States West Texas Intermediate crude declined by two percent to $68.37 per barrel.
The drop follows reports that the Organisation of Petroleum Exporting Countries (OPEC), and its allies, known as OPEC+, will proceed with an oil output increase in April.
Industry players in Nigeria’s downstream oil sector, have linked petrol prices to fluctuations in crude oil prices, and the exchange rate.
Last week, the Dangote Refinery reduced its ex-depot PMS price from N890 per litre, to N825, prompting the Nigerian National Petroleum Company Limited (NNPCL), to match the price.
The move has been described by analysts as sparking a “price war” between the two major suppliers.
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Paul Alaje, an economist said the price reduction is sustainable, suggesting that petrol prices could drop below N700 per litre based on current market realities. He however, warned that a rise in crude oil prices due to a global crisis could reverse the trend.
“As of today, our computation reveals that PMS should be around N795 to N820 per litre,” Alaje said during an interview on Channels Television.
Similarly, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, noted that petrol prices will continue to fluctuate, influenced primarily by foreign exchange rate, and international crude oil prices.
While the decline in crude oil prices could mean more affordable fuel for Nigerians, the current price remains below the $74 per barrel benchmark projected by the federal government in the 2025 budget.
