The cost of Premium Motor Spirit (PMS), commonly known as petrol, could decline further if crude oil prices continue to slide. A stable naira against the dollar in the foreign exchange market may also contribute to this trend.

Crude Oil Prices Hit 12-Week Low

Recent reports indicate that crude oil prices fell by approximately 2% this week, reaching a 12-week low. This drop comes as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) move forward with a planned oil output increase in April.

• Brent crude dropped by $1.19 (1.6%) to settle at $71.62 per barrel.
• U.S. West Texas Intermediate (WTI) crude declined by $1.39 (2%), closing at $68.37 per barrel.

According to Reuters, these are the lowest closing prices for Brent and WTI since early December 2024.

Petrol Prices in Nigeria Declining

Industry experts state that two major factors influence the cost of refined petroleum products in Nigeria: crude oil prices and the exchange rate. The recent dip in crude oil prices has already led to a reduction in PMS costs.

Last week, the Dangote Refinery lowered its ex-depot PMS price from N890 to N825 per litre. The Nigerian National Petroleum Company Limited (NNPC) followed suit, aligning its price with Dangote’s, sparking competition in the market.

Experts Predict Further Reductions

Economist Paul Alaje believes the current market conditions support a further reduction in petrol prices, suggesting they could drop below N700 per litre. However, he cautioned that any sudden global crisis could drive crude oil prices back up, impacting fuel costs.

“Based on today’s exchange rate, PMS prices could stabilize between N795 and N820 per litre. The only risk is a surge in crude oil prices due to international market fluctuations,” Alaje stated on Channels Television.

Foreign Exchange and Crude Prices Remain Key Factors

The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, emphasized that PMS prices will continue to fluctuate based on forex rates and global oil prices.

While the current crude price is below the $74 per barrel benchmark projected in Nigeria’s 2025 budget, lower oil prices benefit Nigerian consumers by making petrol more affordable. If the downward trend continues, further price cuts may be imminent.

Stay updated with Springs News NG for the latest developments on fuel prices and the energy sector.