The expected open market price of Premium Motor Spirit, popularly known as petrol, has dropped to N114.53 per litre, N30.47 lower than the approved pump price of the product.
It was reported that on March 2, 202 the spread of coronavirus had wiped off subsidy on petrol, thereby, leading to the sharp drop in crude oil prices.
The landing cost of petrol plunged to N123.88 per litre on February 27, and the product was expected to be sold at N143.25 that day if the price of the product was adjusted to reflect the change in crude oil prices, according to Petroleum Products Pricing Regulatory Agency.
The international oil benchmark, Brent crude, has been on a downward trend since the coronavirus broke out in China. It tumbled by as much 30 percent on Monday to $31, its lowest in four years as Saudi Arabia launched a price war.
The expected open market price of petrol was N182 per litre at the end of last year as Brent, against which Nigeria’s oil is priced, traded around $67 per barrel.
With the recent steep fall in crude oil prices, the cost of petrol plus freight dipped to $379.37 per metric tonne (N86.84 per litre) on Tuesday from $466.43 per MT (N106.78 per litre) last Friday, according to the PPPRA.
The cost-plus freight, which stood at $668.29 per MT (N152.99 per litre) on December 31, 2019, fell to $502.29 per MT (N114.97 per litre) on February 27, 2020.
The latest pricing template obtained by our correspondent from the PPPRA showed that the landing cost declined further to N95.16 per litre on March 10 from N115.52 per litre on March 6.
The expected open market price of the product fell to N114.53 per litre on Tuesday from N134.89 per litre last Friday.
Nigeria, Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.
While the diesel and kerosene prices had been deregulated, the government still pay subsidy to make petrol cheaper at the pump.
The landing cost of petrol has fallen by 41.5 percent since December 31, 2019, when it stood at N162.68, the PPPRA data showed