In response to the rising foreign exchange rates and increased overhead costs, oil marketers in Nigeria have adjusted their pump prices. Major oil marketers, including 11 Plc (formerly Mobil Oil Nigeria Plc), Conoil, TotalEnergies, MRS, and NNPC Retail Limited, have set their new price at N619 per liter, while independent marketers have raised their prices to as high as N770 per liter.
Only NNPC Retail Limited has maintained its previous retail price of N568 per liter, resulting in long queues at their stations. Other major marketers have increased their prices, citing harsh market realities. Many motorists expressed shock and concern about the financial strain this price hike would place on their budgets. KC, a manager at a filling station, mentioned that the price hike was a directive from management, which he had to enforce.
Mr. Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria (MEMAN), explained that the hike was inevitable due to the rising cost of foreign exchange rates. Although the procurement cost of petrol from NNPC Trading, the sole importer, has remained stable, other associated costs have surged. For instance, the cost of ship-to-ship transfers has jumped from $40,000 per day to $70,000 per day. Additionally, fees paid to agencies like the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) have increased due to the current exchange rate of N1,560 to $1.
“The reason some major marketers are still selling at N619 per liter is that they receive direct deliveries into their tanks from NNPC vessels, which is becoming increasingly rare,” Isong noted. “The entire downstream value chain depends on the dollar, and as the dollar strengthens, petrol prices rise. Conversely, if the dollar weakens, petrol prices should drop.”
The recent price hikes are also linked to ongoing fuel scarcity in major parts of the country, especially in Abuja and Lagos. Private depot owners have raised the ex-depot price of petrol from N630 to N720 per liter, making it difficult for independent marketers to purchase the product.
Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that many filling stations remained closed because they had no fuel. He urged NNPC, as the sole importer, to clarify the situation to Nigerians. “Stations are shut because they do not have fuel to sell. The NNPC, being the sole importer, is in the best position to tell us what is happening. Currently, independent marketers cannot afford the prices set by private depots, which range from N715 to N720 per liter. Including transportation and other depot expenses, the cost becomes prohibitive for marketers,” Fashola explained.
Abubakar Maigandi, National President of IPMAN, highlighted additional challenges such as poor road conditions and rising ex-depot prices, which have reached N715 per liter compared to previously lower prices. These factors, combined with additional margins by marketers, have driven up the cost of petrol at the pump.
The recent hikes in petrol prices in Nigeria are driven by increased overhead costs and a volatile exchange rate. As stakeholders navigate these challenges, the impact on consumers and the broader economy remains significant. Consumers are grappling with higher expenses, and the overall economic strain continues to grow.
