The price of Premium Motor Spirit (PMS), commonly known as petrol, is edging close to ₦1,000 per litre across several Nigerian cities, as a combination of foreign exchange volatility, import dependence, and distribution bottlenecks continues to squeeze the downstream oil sector.
Since the removal of fuel subsidy in 2023, petrol prices have been largely determined by market forces, with the exchange rate playing a major role in determining landing costs. The sustained depreciation of the naira now trading above ₦1,500 per dollar in the parallel market has sharply increased the import bill for fuel marketers.
Industry operators say that, despite deregulation, Nigeria’s inability to refine petroleum products locally has left the market vulnerable to global oil price swings and currency instability. With crude prices hovering around $90 per barrel, importers are grappling with high freight charges, taxes, and financing costs, all of which are passed on to consumers.
“Petrol prices are reacting to pure market economics high crude prices, a weak naira, and limited local refining capacity. Until these structural issues are fixed, prices will remain under pressure,” said energy analyst Bala Zakka.
The Nigerian National Petroleum Company Limited (NNPCL), which remains the dominant fuel importer, has struggled to maintain price stability amid supply challenges and rising logistics costs. Independent marketers, meanwhile, claim they cannot sell below ₦950 per litre without incurring losses.
Commuters and small business owners are feeling the pinch, with transport fares and the cost of goods rising steadily. The situation has renewed calls for urgent intervention, including faster rehabilitation of Nigeria’s refineries and stronger incentives for private sector refining projects like the Dangote Refinery.
Experts warn that unless the forex situation improves and domestic refining begins in full scale, petrol prices could rise further deepening inflationary pressures and worsening the cost-of-living crisis for millions of Nigerians.
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