Global crude oil prices, including Nigeria’s Bonny Light, have dropped significantly to $98 per barrel following growing speculation that the conflict between the United States and Iran may soon conclude. Despite this downward trend in the international market, petrol pump prices across Nigeria have remained high. Marketers, who previously responded with swift price hikes during crude oil surges earlier in the week, have yet to adjust their rates downward.
The decline in global prices followed statements by President Donald Trump indicating that efforts are ongoing to end the hostilities. This development has fueled optimism across the global oil market, with Brent crude futures falling 3.17 per cent to $98.06 a barrel. Similarly, U.S. West Texas Intermediate declined 3.31 per cent to settle around $91.93. These figures represent the lowest levels recorded in the past three weeks, contrasting with the $110 and $120 per barrel range seen during the peak of tensions.
On the local front, market operators appear to be resisting price adjustments. Findings indicate that depot owners continue to sell the product at N1,285 per litre. Establishments selling at this rate include A.A. Rano, African Terminal, Aiteo, Ascon, and Bono, while others maintain even higher prices. At filling stations in Lagos and its environs, MRS retailed petrol at N1,332 per litre, while several others, particularly independent marketers, sold the product at N1,342 per litre and above depending on location. A few stations operated by major marketers maintained a bottom range between N1,320 and N1,325 per litre.
Experts have attributed the price mismatch to structural issues within the domestic supply chain and limited competition. The Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, confirmed the pressure on domestic operators. He said, “There is a mismatch. Depot prices are not reacting to the continuous fall in crude oil prices, and this could be traced to limited supply of refined products across different petroleum depots in Nigeria.” He further noted, “This is the result of having a few dominant suppliers. Prices are determined by some of the market leaders and not international benchmarks.”
Similarly, the National President of the Oil and Gas Services Providers Association of Nigeria, Mazi Colman Obasi, noted that the deregulation of the market means prices are driven by market forces. He stated, “Since we have a deregulated market where prices are determined by market forces, we should expect domestic prices to adjust in the coming days or weeks if the current global oil market conditions remain unchanged.” The situation has led to mounting pressure on midstream and downstream operators to respond to the positive developments in the global oil market.
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