Petrol Landing Cost Hits N720/Litre
A well-known marketer in Nigeria has revealed that the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has reached N720 per litre, marking a significant increase from N651 in August.
This development is primarily attributed to the fluctuating exchange rate.
Exchange Rate Volatility Impact
The surge in petrol’s landing cost is primarily driven by the instability in the foreign exchange rate.
As of the latest available data, the Central Bank of Nigeria (CBN) recorded an exchange rate of approximately N766 to one US dollar, while the parallel market exchange rate hovered around N990 to one US dollar.
Insight from PETROCAM CEO
Patrick Ilo, the Chief Executive Officer of PETROCAM Trading (Nig) Ltd., confirmed this price escalation.
He disclosed that his company recently imported 52,000 metric tonnes of petrol, landing at a cost of N720 per litre without subsidies.
Market Dynamics and Subsidy Considerations
Ilo emphasized that his company is unable to sell the petrol at this price due to the pricing structure of the Nigerian National Petroleum Company Limited (NNPCL).
This situation, according to him, indicates that NNPCL is still subsidizing the product, considering the high landing cost.
The Subsidy Perspective
Patrick Ilo expressed his understanding of the government’s stance on subsidies.
He noted that if the landing cost is already at N720, the pump price should logically be around N729 per litre in Lagos State if the Federal Government had genuinely discontinued subsidizing the product.
Impact on Diesel Prices
Ilo highlighted that the real market dynamics are reflected in the cost of diesel.
He stated that at the current landing cost, the federal government would be subsidizing more than N100 per litre for petrol, further emphasizing the disparity between landing costs and market prices.
In conclusion, the fluctuations in exchange rates have contributed to a significant increase in petrol’s landing cost, prompting discussions about subsidies and market dynamics.
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