Experts have predicted that the price of Petroleum Motor Spirit (PMS) may drop further as crude oil prices continue to crash in the international market.
Brent Crude fell to $70.5 per barrel, while West Texas Intermediate (WTI) dropped to $67.56, their first weekly loss in a month and first monthly decline since November 2024.
According to reports, crude oil prices fell after the US government implemented fresh tariffs, raising concerns about global trade tensions and their potential impact on fuel demand.
It was reported that the Organisation of the Petroleum Exporting Countries and allies like Russia, known as OPEC+, decided to proceed with a planned April oil output increase.
Meanwhile, professionals in the Nigerian downstream oil sector have said that the crude oil and exchange rate play a huge role in the costs of refined petroleum products.
With oil prices weakening, the naira depreciated slightly to N1,515/$ on Tuesday, demonstrating that Nigeria’s economic stability remains tightly linked to crude oil performance.
Recall that last week, the Dangote Refinery announced the reduction of the PMS price from N890 to N825 per liter effective from 27 February.
Shortly after, the Nigerian National Petroleum Company Limited (NNPCL) also slashed its PMS price from N890 to N825 per liter.
An economist, Paul Agbaje while speaking on a television program, noted that the current price of the PMS is sustainable and can be reduced to N700/liter based on the current realities of the exchange rate.
Agbaje explained that the only challenge would be if the price of crude oil goes up in the international market due to a global crisis. He added that the current computation reveals the price of PMS to be between N795 and N820 per liter.
However, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry has insisted that the price of petrol will continue to fluctuate based on the foreign exchange rates and international crude oil prices.
While the decline of Nigeria’s flagship crude, Qua Iboe, by 1.9% to $74 per barrel could mean an affordable fuel for an average Nigerian, it is below the federal government’s projection in the 2025 budget.
