Fuel Price Hits N1,117 Per Litre

The Major Energy Marketers Association of Nigeria (MEMAN) announced on Wednesday that the landing cost of Premium Motor Spirit (PMS), also known as petrol, was N1,117 per litre as of July 16, 2024.

This was disclosed during a webinar with journalists.

MEMAN also revealed that the landing cost of diesel was N1,157 per litre, while aviation fuel was N1,127 per litre.

The N1,117 landing cost of petrol significantly exceeds the current pump prices in Nigeria, where filling stations operated by the Nigerian National Petroleum Company Limited (NNPC) and major marketers sell PMS for between N617 and N660 per litre, and independent marketers sell it for N700 per litre or more.

NNPC, the sole importer of petrol in Nigeria, has consistently denied subsidising PMS costs but has not disclosed the landing cost. MEMAN’s revelation marks one of the first public disclosures from industry marketers, with Executive Secretary Clement Isong stating that the costs were sourced from independent energy price benchmark providers and that such information would be released regularly.

Recently, independent oil marketers accused private depot owners of increasing the ex-depot price of petrol from N630 to N720 per litre.

Energy sector expert Prof. Wumi Iledare noted the disparity between the cost of diesel and petrol in Nigeria, suggesting an underlying issue. He questioned whether NNPC was absorbing the cost difference, implying an implicit subsidy or under-recovery since the petrol price does not reflect market production costs.

Similarly, Prof. Adeola Adenikinju, President of the Nigerian Economic Society, asserted that the current PMS price is subsidised by the government, which buys at higher rates and sells at subsidised rates.

The International Monetary Fund (IMF) recently urged Nigeria to remove implicit fuel and electricity subsidies, warning that these subsidies would consume three percent of the nation’s GDP in 2024, up from one percent the previous year. Although President Bola Tinubu declared the removal of fuel subsidies during his inauguration on May 29, 2023, the IMF noted that implicit subsidies had been reintroduced to help Nigerians cope with high inflation and exchange rate depreciation.

Despite these concerns, the NNPC and the Federal Government have vehemently denied subsidising the current price of PMS.