The rising price of crude oil in the international market has pushed up the landing cost of Premium Motor Spirit (petrol) imported into Nigeria to N186 per litre.
This is because the deregulation of petrol price by the Federal Government last year meant that the pump price of the product will reflect changes in the international oil market.
The international oil benchmark, Brent crude, closed at $63.96 per barrel on February 16, up from $59.34 per barrel on February 5.
Against the backdrop of the rising price of oil prices, the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.
Based on petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N186.33 per litre on February 16, with the pump price of the product estimated at N209.33 per litre.
The cost of petrol quoted on Platts was $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.
Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).
The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.
The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).
Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.
However, the Nigerian National Petroleum Corporation (NNPC) which is the sole importer of petrol, said in spite of the rise in the price of crude, it would not increase the ex-depot price of petrol in February 2021.
The corporation urged petroleum products marketers not to engage in the hoarding of the product in order not to create artificial scarcity and unnecessary hardship for Nigerians.
The Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Adetunji Oyebanji, had said called for dialogues among the stakeholders, including members of the public, on 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.