As a result of the rising price of oil, the landing cost pf Premium Motor Spirit popularly known as petrol has increased to N186.33 per litre. It was earlier reported that the landing cost of petrol rose to about N180 per litre on February 5.
Crude oil price is the major determinant of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.
On February 16, the landing cost of petrol rose to N186.33, going by the template of the Petroleum Products Pricing Regulatory Agency. The pump price of the product is expected to be N209.33 per litre.
The international oil benchmark, Brent crude, which was $59.34 per barrel on February 5 has come up to $63.96 per barrel on February 16.
Other cost elements that make up the landing cost include freight, lightering expenses, insurance cost, Nigerian Ports Authority charge, Nigerian Maritime Administration and Safety Agency charge, jetty Throughput charge, storage charge and financing.
The pump price is the sum of the landing cost, wholesale margin and the distribution margins. Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.
The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.
Recently, oil marketer said that they were ready to resume importation of petrol if the foreign exchange was made available to them at a competitive rate.
Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.
At a virtual press briefing, the Chairman, Major Oil Marketers Association of Nigeria, Mr. Adetunji Oyebanji said “The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens.”