Fuel price rising back up, now N935 per litre in Lagos, as landing cost of imported fuel increases
By Jeph Ajobaju, Chief Copy Editor
Fuel price at the weekend rose back to between N925 and N935 per litre in Lagos – where it is normally cheapest – sequel to the cancellation of the naira-for-crude agreement with Dangote Refinery by the Nigerian National Petroleum Company (NNPCL) and increase in the landing cost of fuel imported by marketers.
Dangote Refinery had in February reduced its ex-depot price to N825 per litre which prevailed until the NNPC announced it would no longer sell crude to the refinery in naira.
In turn, Dangote Refinery issued a statement saying it would be selling its products in dollar (or dollar-naira equivalent) to the domestic market until the NNPC reverts to selling crude to it in naira.
On March 24, the landing cost of fuel imported by marketers rose from N797 per litre to N843.28, an additional N46 per litre.
Some filling stations like TotalEnergies sold at N935 per litre; MRS N925.
The latest bulletin of the Major Energy Marketers Association of Nigeria (MEMAN) explained that the increase in landing cost is caused by the rise in international crude prices in the past two weeks due to the transition from winter to summer specification of petrol in Europe, which typically comes at a premium.
MEMAN said supply constraints have emerged as arbitrage flows into Europe remain unprofitable, and Amsterdam-Rotterdam-Antwerp (ARA) hub stocks have dropped to a 12-week low.
ARA is a crucial global oil and biofuel hub known for its physical infrastructure, pricing benchmarks, and significant oil consumption.
MEMAN also explained that:
- Seasonal refinery maintenance across Europe and a recent fire at the Falconara Refinery in Italy have further restricted supply, adding to market tightness and price volatility.
- Nigeria’s foreign exchange (forex) rate, though fairly stable, has thrown up minimal fluctuations in recent periods.
- Therefore, the landing cost of petrol, being fundamentally influenced by these elements, is likely to change several times intra-day.
- Savings can be achieved through negotiations, access to forex, and logistics efficiencies, for example, by eliminating ship to ship (STS) transfer where possible or receiving larger cargos.
- The landing cost into Apapa/ASPM Jetty is calculated based on the following assumptions – exchange rate, finance charges at 32 per cent per annum for 30 days; STS and related charges; NIMASA charges at 2 per cent of local STS; NMDPRA at 0.5 per cent MDGIF; NPA and VAT charges covering towage, berthage/mooring, ship dues, cargo dues, contingency, fire coverage, agency fee; other costs at N2 per litre.
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