In a surprising turn of events that could offer relief to millions of Nigerians, the Crude Oil Refinery Owners Association of Nigeria (CORAN) has stirred conversations with an optimistic forecast: petrol might soon be sold for as low as ₦400 per litre.
Yes, you read that right.
According to CORAN, if global crude oil prices continue their downward spiral and reach $50 per barrel, Nigerians could see petrol prices fall to about ₦350-₦400 per litre. With crude recently dipping to around $65 per barrel, this scenario doesn’t seem too far-fetched.
But What’s Driving This Potential Drop?
The answer lies in the very foundation of petrol pricing: crude oil. A large chunk of what we pay at the pump is determined by the cost of crude. As global prices drop, the logic follows that petrol should become more affordable.
However, that hasn’t always been the case.
Despite falling global prices, petrol in Nigeria has sometimes become more expensive. In recent weeks, the landing cost of petrol decreased to ₦865 per litre, but the ex-depot price curiously rose to ₦900. Industry watchers are scratching their heads.
So, What’s the Catch?
One key factor is the currency of crude oil transactions. The Nigerian National Petroleum Company Limited (NNPCL) insists on selling crude to local refiners in US dollars. For Nigerian refiners who operate in naira, this creates an uphill battle. The exchange rate fluctuations add pressure to the final cost, undermining the benefit of cheaper crude.
CORAN has been vocal in pushing for a return to the naira-for-crude initiative. By allowing local refiners to purchase crude in naira, the cost burden would lighten significantly, making those ₦400-per-litre dreams a tangible reality.
Read also: Why Nigerians still pay more for fuel despite falling crude prices – refiners
Competition is Heating Up
Adding more fuel to the price drop conversation is the growing competition between Dangote Refinery and the NNPC. In December 2024, Dangote slashed its ex-depot price to ₦899.50, prompting NNPC to follow with a drop to ₦965. This price war created a ripple effect, with other retailers adjusting their pump prices as well.
IPMAN (Independent Petroleum Marketers Association of Nigeria) credits this competitive pressure for the recent price dips. And with more refineries like Warri and Kaduna expected to come online, the battle for market share could mean even lower prices for consumers.
A Glimmer of Hope or Wishful Thinking?
While the stars may be aligning for a significant drop in petrol prices, it’s not yet a done deal. The interplay of global oil markets, currency exchange, domestic refining capacity, and government policies will ultimately decide whether we get to buy petrol at ₦400.
Still, it’s a hopeful sign in a country where fuel prices heavily influence daily life. If CORAN predictions hold water, Nigerian motorists could be looking at a much-needed financial breather.
Fingers crossed.
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