Oil prices recently fell to a 12-week low, with Brent crude settling at $71.62 per barrel and the U.S. West Texas Intermediate (WTI) dropping to $68.37. The decline follows reports that OPEC+ will proceed with an oil output increase in April, despite global market conditions.
Industry players in Nigeria’s downstream oil sector highlight crude oil prices and exchange rates as the primary factors influencing the cost of refined petroleum products. The recent drop in crude prices, coupled with a stable naira, has already led to reductions in petrol prices.
Last week, the Dangote Refinery cut its ex-depot PMS price from ₦890 per litre to ₦825, prompting the Nigerian National Petroleum Company Limited (NNPC) to match the price. This move sparked what many observers described as a competitive price war in the market.
Economist Paul Alaje believes the price reduction is sustainable and suggests that petrol prices could drop below ₦700 per litre if current market trends continue. However, he warned that any global crisis leading to a rise in crude oil prices could alter the trend.
“As of today, our calculations indicate that PMS should be priced between ₦795 and ₦820 per litre,” Alaje stated in an interview on Channels Television. He emphasized that price stability depends largely on crude oil costs and exchange rates.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, echoed similar sentiments, stating that petrol prices will continue to fluctuate based on global oil trends and foreign exchange rates.
Despite the recent decline, Nigeria’s crude price benchmark for the 2025 budget stands at $74 per barrel, meaning further drops in oil prices could have broader economic implications beyond just fuel costs.
