There was a rise in the price of crude oil to $95.70 per barrel on Monday from $94 per barrel over the weekend, in addition to inflation and the depreciation of the naira in Nigeria, which has culminated in the price of imported fuel rising in the global market.
According to reports obtained from the Organisation of Petroleum Exporting Countries (OPEC), the price of the OPEC Basket made up of Bonny Light (Nigeria), Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basrah Medium (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Arab Light (Saudi Arabia), Murban (UAE), and Merey (Venezuela) has risen further to $95.70 per barrel from $94.
Oil traders predicted that refiners would pass on the high oil price to fuel importers, including Nigeria, which imports all of its gasoline from the global market.
However, new imports would necessitate more Naira, which is currently trading at N950/USD as the dollar shortage continues to impact the nation’s economy.
Mike Osatuyi, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), could not be reached for comment.
However, an authoritative industry source said: “The price of crude oil continues to rise in the international market. At N950 per dollar, foreign exchange is a major problem that can push landing costs to more than N600 per litre from over N500 per litre. In addition, the fuel subsidy has risen from N150 per litre to more than N160 per litre. The market is plagued by insecurity. This is why, months after the market’s deregulation, oil marketers have been unable to import the product.”
Crude oil prices increased by 7.5 percent to $85.89 per barrel in August 2023, up from $79.92 per barrel in July 2023, as the Naira depreciated to N775/dollar in the official market and inflation, which is currently at 22.79 percent, combined to raise the landing cost of petrol to N600 per litre in the domestic market.
The landing cost excludes additional costs such as depot-related charges, transportation, and marketers’ margin, which would total more than N700 per litre for delivery at filling stations.
According to sources close to oil marketers, the landing cost for September 2023 is expected to rise further as the factors that drove the increase in August figures worsen.
While NNPC Limited and major marketers continue to sell the product at N568 per litre, their independent counterparts charge much higher prices, ranging from N570 to N700 per litre in different parts of the country.