Global oil prices have fallen close to levels recorded before the US-Iran conflict, raising expectations among Nigerians that the price of petrol may also drop.
However, pump prices across the country have largely remained unchanged, sparking concerns over the slow response of the domestic market to falling international crude prices.
Brent crude, the global benchmark, dropped to $73.14 per barrel on Wednesday, while West Texas Intermediate fell to $69.85 per barrel.
Before the US-Iran hostilities, petrol sold between ₦770 and ₦800 per litre in parts of Nigeria.
However, following the conflict and supply concerns triggered by tensions around the Strait of Hormuz, pump prices rose sharply.
Checks showed that petrol currently sells between ₦1,200 and ₦1,300 per litre, depending on location.
Although crude prices have continued to fall since the peace agreement between the US and Iran, the price of Premium Motor Spirit in Nigeria has dropped by only about ₦75.
Analysts said the fall in crude prices should ordinarily create room for lower refined petroleum product costs if current market conditions persist.
A petroleum marketer who spoke to Daily Trust said the ex-depot price should not exceed ₦700 per litre, compared with the current ₦1,180.
The marketer argued that lower crude prices and improved supply conditions should reflect in domestic pump prices.
An oil and gas analyst, Dr Ayodele Oni, however, said the fall in crude prices may not immediately translate to lower petrol prices for Nigerians.
“For the ordinary Nigerian, the honest answer is that even if crude falls back, pump prices are unlikely to follow it all the way down,” Oni said.
He explained that Nigeria’s deregulated petroleum market is affected not only by global crude prices but also by the exchange rate.
“Our market is deregulated, and the binding factor is no longer Brent or crude prices alone, but the exchange rate, since landed petrol cost is priced in dollars,” he said.
According to him, lower crude prices would only ease pressure on transport and food costs if the naira remains stable.
“Lower crude is necessary, but on its own it is not enough. The naira does much of the heavy lifting,” he added.
The decline in crude prices has renewed public demand for cheaper petrol, especially as fuel prices continue to influence transport fares, food prices and general cost of living.
Industry watchers say if crude prices remain low and the naira holds steady, marketers may come under stronger pressure to reduce pump prices in the coming weeks.
