The surge in crude oil prices across the globe has led to the rise in landing cost of petrol imported to Nigeria, with Premium Motor Spirit (petrol) now selling at N282 per litre.
The rise in landing cost of petrol subsequently translates into increased level of subsidy, as the pump price of the product remains steady at N162 to N165 per litre.
As the price of Brent crude rose to $89.75 a barrel, landing cost of the product rose to N282.29 per litre as at January 20 2021. Note that oil prices were as low as $77.24 per barrel on new year’s eve, the 15.53% rise in less than a month are attributed to high demand for petroleum product and disruption in supply as a result of geographical tensions.
Yesterday (26th January 2021), Brent crude surpassing $90 for the first time since October 2014. U.S. West Texas Intermediate (WTI) crude closed up $1.75, or 2%, to $87.35 a barrel.
Sequel to the turbulence in the oil market, Marketers have reactively increased the price of Diesel to N354 to N360, with the federal government incurring higher subsidy cost.
Recall the FG cancelled fuel subsidy in March 2020 after reducing the pump price of the product to N125 per litre.
The Petroleum Products Pricing Regulatory Agency (PPPRA) released a pricing template in March that signaled the guiding prices for the month.
In the template, petrol pump price was predicted to range from N209.61 to N212.61 per litre,It was based on an average oil price of $62.22 per barrel, and the landing cost of petrol was put at N189.61 per litre.