The Nigerian National Petroleum Corporation has again lowered the ex-depot price of petrol. The latest reduction, announced on Wednesday, will see PMS sold to marketers at ₦108 per liter, down from ₦113.28 per liter.
Final consumers can now expect a similar cut to the price of the product at petrol stations. In March, the ex-depot price of petrol—what marketers pay to purchase PMS from depot owners –had been reviewed downward from ₦133.28 to ₦113.28.
Read more about Business
This had led to a fall in the price of the product at filling stations. Retailers at these stations sold petrol for between ₦123 and ₦125, down from the ₦145 that had prevailed before this.
A new retail price could be announced by the Petroleum Products Pricing Regulatory Agency (PPPRA) shortly. The PPPRA is the agency in charge of maintaining the prices of petroleum products in Nigeria.
In April, Mele Kyari, the Group Managing Director of the NNPC, had promised that his organization would begin announcing a new pricing template for petrol at the start of every month. This was part of the NNPC’s plans to partially deregulate the downstream sector of the petroleum industry in the country.
Local media quotes a spokesperson of the body as saying that price reduction was a strategy that it had adopted to increase its sales. He also said that the price of diesel, which had been deregulated in 2009, would continue to be determined by market forces.
Find our comprehensive listings of businesses in Nigeria here
These price cuts are connected to the recent slump in global crude oil prices. Although Nigeria is a major crude oil producer, it can’t refine the oil it extracts locally. So it imports refined petroleum products and incurs extra costs in the process. These costs add up to make fuel prices higher.
For a long time, the Nigerian government had subsidized the cost of petrol, allowing local consumers to buy it at lower than the actual market price. But with oil prices falling, it no longer has enough to sustain the subsidies. The cost of the product has also fallen; this allows the government to withdraw the subsidies and let the prices float, albeit to a limited extent.
Mele Kyari had claimed in April that there was some appetite within the current administration to end the subsidy. But with prices being announced at set times by the NNPC and PPMC, it does appear that the government is still interested in controlling the price of petrol in some way.
Featured image source: The Guardian NG
Did you find this article useful? Contact us: editor@connectnigeria.com
You might also like:
- How to Prepare Your Business for Q1 2025
- How To Market Your T-shirt Business Offline
- Consumer Technology: Smartphone Penetration in Nigeria
- 10 Tips for Starting a Dropshipping Business in Nigeria
