Amidst growing concerns, there are strong Indications that the Pump Price of Petrol is poised to undergo yet another round of Increases, Marking the third such Increase within a mere 10-week Span.
Oil Marketers have hinted that the landing Cost of Oetrol has escalated month-on-month (MoM) by a staggering 37.4%, Surging from N460 per liter in June 2023 to N632.17 per liter in July 2023.
This Landing cost doesn’t account for additional Expenses such as depot-related Charges, Transportation logistics, and Marketers’ margins.
Once combined, these elements could elevate the delivery Price at filling Stations to nearly N700 per liter.
Insiders within the Oil Marketing Sector have shared with Kukuruku Reporters that the landing cost Projection for August is even more, as the Factors that led to the July escalation have Intensified as of the previous week.
They highlighted that the Foreign Exchange situation remains a primary concern, marked by ongoing Scarcity and a deteriorating Exchange Rate.
As of the previous weekend, the Naira had depreciated by approximately 6.5% in the Official Market and a substantial 25% in the Parallel Market since the last pump price adjustment.
Additionally, the cost of Fuel Imports has risen in response to the recent Surge in Global Crude Oil prices.
A detailed Analysis from a major industry player, Indicated that Marketers were bearing a total direct cost of N604.14 per liter.
This Analysis is divided down into N578.46 for Product cost per liter, N10.37 for freight (Lome-Lagos), N7.37 for port charges, N4.47 for NMDPRA levy, N2.58 for storage cost, N0.47 for Marine Insurance, N0.36 for fendering cost, N0.05 for “others,” and a finance cost of N28.04.
In Specific terms, this Analysis extrapolated the landing cost for 28,000 metric tons of Imported Petrol at over $25 million, covering total Product Cost, total direct cost, and total Finance Cost.
This would Generate sales Revenue exceeding N22 billion but would result in a loss of over N1.6 billion.
Given these circumstances, Marketers have expressed that Importing at the current Pump Price would be Unprofitable, particularly as the Government has not assured a free float of Pump Prices.
Consequently, the Nigerian National Petroleum Company Limited (NNPCL) remains the sole Importer, alongside Minor private Importations from the previous month.
The situation is compounded by Nigeria’s decreasing Crude Oil output, which threatens the Country’s Capacity to Import refined Products.
OPEC’s August 2023 Monthly Oil Market Report highlights dwindling output across various Nations, with Nigeria’s Oil Production declining by 6.5% YoY to 1.26 million barrels per day (bpd) in July 2023, down from 1.2 million bpd in the corresponding period of 2022.
On an MoM basis, the Nation’s output decreased by 3.0% to 1.26 million bpd in July 2023 from 1.3 million bpd in June 2023.
