Nigerians may soon experience a reduction in the prices of petrol and diesel following a significant decline in global crude oil prices, industry marketers have said. However, they caution that any reduction at the pumps may not be immediate.
Crude oil prices fell below $60 per barrel over the weekend, with Brent trading at $59.80 per barrel and the West Texas Intermediate (WTI) at $56.71 per barrel on Monday, according to oilprice.com. This represents a sharp drop from the average of $65 per barrel recorded last Friday. Nigeria’s key crude grades, Brass River and Qua Iboe, were priced at $64.60 per barrel — over $10 lower than the $75 benchmark projected in the 2025 budget. The slump has raised concerns about the viability of the budget assumptions and projected government revenue.
The falling global crude prices, combined with exchange rate fluctuations, remain the primary determinants of the domestic cost of refined petroleum products. Consequently, stakeholders believe that the recent decline may eventually lead to price adjustments, but only after some market stability.
In an interview with The PUNCH, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, explained that oil speculators are closely monitoring the market.
“Prices may come down, but not immediately. The market will first evaluate whether the current drop is based on natural or artificial causes. If the decline is due to temporary or speculative factors, prices might not adjust right away. However, if the trend continues for the next two weeks, we may begin to see a reduction in pump prices,” Ukadike said.
Corroborating this view, the President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, noted that crude oil purchased at higher prices is still in circulation, which may delay any immediate change in product pricing.
“There is always a lag between changes in crude prices and their impact on retail prices. Even though input costs may fall due to the current slump, the system is still processing earlier feedstock acquired at higher costs,” he said. “Price adjustments are inevitable but won’t happen as quickly as consumers may expect.”
Global oil markets have come under renewed pressure following a decision by OPEC+ to accelerate oil production hikes. Reuters reported that oil prices declined by over $1 per barrel on Monday, hitting their lowest levels since April 9. This followed the group’s announcement to increase output by 411,000 barrels per day in June, as part of a phased reversal of previous cuts.
The latest agreement brings total increases from April to June to 960,000 barrels per day — a 44 per cent reversal of the 2.2 million bpd cuts implemented since 2022. Analysts believe the move could add further downward pressure on prices amid an already uncertain global demand outlook.
While these global dynamics may ultimately benefit Nigerian consumers, industry experts stress the need for patience as the market adjusts to the evolving landscape.
