Petrol price hike looms as import cost surges

Nigerians may soon face higher petrol prices as the cost of importing Premium Motor Spirit (PMS) has surged above retail and depot prices, threatening to squeeze fuel marketers' profit margins.

According to the Major Energies Marketers Association of Nigeria (MEMAN), the landing cost of imported petrol rose to ₦872 per litre on April 28 before dipping slightly to ₦868 on April 29.

This marks a steady climb from ₦859 recorded on April 23 and now exceeds the ₦835 per litre ex-depot price announced by the Dangote Petroleum Refinery.

“The current landing cost is putting pressure on marketers’ margins,” a MEMAN spokesperson said, as traders now grapple with a gap between import expenses and allowable retail prices.

Disparities in petrol prices

Reports show Dangote sold petrol at ₦840 per litre on Thursday, May 1, with Matrix and Rainoil offering similar prices in Lagos.

However, some marketers, including Pinnacle, Mao, and Sahara, listed prices as high as ₦889 per litre. NIPCO sold at ₦842 in Lagos, while depot prices from First Fortune, Sigmund, and others hovered between ₦868 and ₦875, particularly in Warri.

Location continues to influence pricing, with lower depot prices found in Lagos and significantly higher rates in the South-South region due to logistics challenges.

Despite Dangote ramping up domestic production, marketers are still importing PMS to meet national demand.

This reliance on imports leaves pump prices vulnerable to international shipping and foreign exchange volatility.

Analysts warn that unless government intervention or pricing adjustments occur, a retail price hike is inevitable.