Petrol prices fall first time in 9 months on improved supply

The average price per litre paid by Nigerians for petrol has fallen for the first time in nine months to N254 in April this year, according to the National Bureau of Statistics (NBS), a development analyst pin on steady supply and a fall in crude oil prices.

Data obtained from NBS shows that on a month-on-month basis, it decreased by 3.87 percent from N263.76 in March this year. On a year-on-year basis, it increased by 47.18 percent from N172.61.

Mike Osatuyi, the national operations controller at the Independent Petroleum Marketers Association of Nigeria, told BusinessDay that the drop in petrol prices is due to a consistent supply of the product and a fall in crude oil prices last month.

“If there is a consistent supply of petrol in the country, the product price will fall. This means the government is consistent, and there is no challenge in supplying the product. Also, the drop in petrol prices was influenced by the fall in crude oil prices during that period, “he said.

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Towards the end of April and the first week of May, Brent crude oil prices fell by 17 percent from $87.42 on April 12 to $71.94 on May 4. When Brent crude oil prices drop on the international market, it generally leads to a decrease in the price of petrol in Nigeria. This is because the cost of crude oil represents a significant portion of the overall production cost of petrol.

According to Osatuyi, the drop in petrol prices may continue, but it depends on policies by the incoming administration. He added that the controversial petrol subsidy will be removed as promised by President-Elect, Asiwaju Bola Ahmed Tinubu in his manifesto.

According to NBS, Taraba State had the highest average retail price for petrol with N320, followed by Imo with N310.55 and Jigawa with N305.00. On the other hand, Sokoto recorded the lowest average retail price for petrol with N195, followed by Benue with N198.13 and Kogi with N206.11.

In addition, analysis by zone showed that the South-East recorded the highest average retail price in April 2023 with N291.15, while the North-Central had the lowest with N208.88. The price of petrol differs in different states or regions of the country due to differences in distribution costs, taxes, and local market dynamics.