Petrol marketers across Lagos increased pump prices over the weekend, with the commodity now selling between N925 and N935 per litre at various filling stations.
This price surge follows a rise in the landing cost of petrol, the suspension of naira payments by Dangote Refinery for fuel sales, and delays in negotiations over the naira-for-crude policy.
As of last Monday, the landing cost of petrol jumped to N843.28 per litre, up from N797 per litre two weeks prior—an increase of N46 per litre.
At some filling stations, TotalEnergies sold petrol at N935 per litre, while MRS offered it at N925 per litre.
Factors behind the price hike
According to the Major Energy Marketers Association of Nigeria (MEMAN), the spike in landing costs is primarily due to global market conditions. These include:
- Seasonal price shifts as Europe transitions from winter to summer gasoline specifications.
- Supply constraints, as arbitrage flows into Europe have become unprofitable, leading to a 12-week low in stock levels at the Amsterdam-Rotterdam-Antwerp (ARA) hub, a major global oil trading center.
- Refinery disruptions, including seasonal maintenance in Europe and a recent fire at the Falconara refinery in Italy, further tightening supply.
Despite these challenges, MEMAN noted that the foreign exchange rate has remained relatively stable with minimal fluctuations.
Potential cost-saving measures
The association suggested that savings could be achieved through:
- Negotiations on procurement terms.
- Access to foreign exchange at competitive rates.
- Logistics efficiencies, such as reducing Ship-to-Ship (STS) transfers and using larger cargo shipments where possible.
Breakdown of landing cost calculations
MEMAN stated that the landing cost into Apapa/ASPM Jetty is based on multiple charges, including:
- Exchange rate and finance charges at 32% per annum for 30 days.
- Regulatory charges, including NIMASA (2% of local STS) and NMDPRA (0.5% MDGIF).
- NPA and VAT charges for berthage, mooring, ship dues, cargo dues, and contingency costs.
- Miscellaneous costs amounting to N2 per litre.
Given these factors, petrol prices in Lagos may continue to fluctuate, with potential adjustments depending on global oil trends, forex stability, and local logistics improvements.
