Petrol landing costs rises amid exchange rate volatility

Petroleum landing costs at Nigeria’s Apapa/ASPM jetty are under increasing pressure due to volatile global oil prices and fluctuations in the country’s exchange rate, according to data from the Major Energies Marketers Association of Nigeria (MEMAN).

The data reveals that the landing cost for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Aviation Turbine Kerosene (ATK) has risen significantly, with the exchange rate playing a crucial role in driving up costs.

The calculations, based on a N1,655.88/$1 exchange rate from the Central Bank of Nigeria’s (CBN) weighted average rate at the Nigerian Foreign Exchange Market (NFEM), show that Nigeria’s petrol imports are becoming more expensive.

The spot landed cost for gasoline now stands at N950.09 per litre, while the 30-day average cost of bringing gasoline into tank is N976.05 per litre. This sharp increase in costs reflects the impact of currency volatility and heightened global prices, partly due to geopolitical tensions in the Middle East.

Read also: Relief for Nigerians as petrol landing cost drops to N975/litre

For product specifics, the data outlines a product quantity of 38,000 metric tons of Premium Motor Spirit (PMS), also known as petrol, delivered at the ASPM jetty, with Automotive Gas Oil (AGO), also known as diesel, and Aviation Turbine Kerosene (ATK) calculated for 20,000 metric tons and 15,000 metric tons, respectively, delivered to the NPSC jetty.

The PMS price is based on Argus Gasoline Euro-Bob rates for West Africa plus a premium, while AGO and ATK are benchmarked to ICE Futures Europe CIF and Argus Jet/Kerosene prices with additional premiums.

According to MEMAN, other costs influencing the landing price include finance charges at 32 percent per annum calculated over 30 days, freight charges spanning 10 days, and Nigerian Ports Authority (NPA) fees covering towage, mooring, and other port-related expenses.

The Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) also impose fees, adding further to the overall cost burden.