This trend would be further reinforced by the naira’s continued stability against the dollar in the foreign exchange market.
Crude oil prices fell by approximately 2% this week, reaching a 12-week low, following reports that OPEC+ plans to proceed with a planned increase in oil output in April. Specifically, Brent futures dropped $1.19, or 1.6%, settling at $71.62 per barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.39, or 2%, closing at $68.37. These represent the lowest closing prices for both Brent and WTI since early December.
OPEC+—which includes the Organisation of the Petroleum Exporting Countries (OPEC) and key allies like Russia—has confirmed its decision to move forward with the planned increase in oil output. This decision has led industry stakeholders in Nigeria’s downstream oil sector to acknowledge that both crude oil prices and the exchange rate are the primary factors influencing the cost of refined petroleum products.
Recently, the Dangote Refinery reduced its ex-depot price for PMS from N890 per litre to N825. In response, the Nigerian National Petroleum Company Limited (NNPC) followed suit, sparking what many have described as a price war.
Economist Paul Alaje has expressed that the recent reduction in petrol prices is sustainable, predicting that the price could potentially fall below N700 per litre, given current market conditions. Alaje noted, however, that a global crisis could lead to an uptick in crude oil prices, which would disrupt the current pricing structure. As he shared on Channels Television, “Based on today’s exchange rate, a petrol price reduction to N700 is sustainable. The challenge arises if global events drive crude oil prices up. For now, we are experiencing relative stability.” His calculations indicate that PMS should be priced between N795 and N820 per litre.
Billy Gillis-Harry, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, affirmed that the price of petrol will remain subject to fluctuations driven by exchange rates and international crude oil prices. However, the current lower prices offer significant relief for Nigerian consumers, especially as the price remains below the $74 per barrel forecasted by the Federal Government in the 2025 budget.
