Fuel Price Volatility Driven by Crude Sourcing, Refining Costs

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has identified several factors contributing to fuel price volatility in Nigeria. Head of Public Affairs, Mr George Ene-Ita, explained that crude oil sourcing, single-source domestic refining, logistics, and transportation costs are among the key drivers of fuel price fluctuations.

Ene-Ita stated that the deregulation of fuel prices has made them subject to market volatility, with various factors influencing product pricing. These include the time lag between crude procurement and arrival at refineries, marine and inland taxes associated with petroleum products movement and supply, transportation costs, and landing fees.

The current market price for Brent Crude oil is $96.28 per barrel, driven by geopolitical tensions in the Middle East. Fuel prices currently range from N1,299 to N1,350 in Abuja, following an upward adjustment in ex-depot prices by Dangote Refinery. Motorists and consumers have expressed concerns over the continued rise in fuel prices, which they say has worsened hardship, inflation, and living costs.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged the Federal Government to intervene in crude oil pricing for domestic refining to moderate fuel prices and ease pressure on consumers. IPMAN President Alhaji Maigandi Garima suggested that government intervention could be achieved by reducing the cost of crude supplied to domestic refineries during periods of international market volatility.