The price of Premium Motor Spirit (PMS), popularly known as petrol, could fall to as low as N900 per litre in the coming days if global crude oil prices continue their downward trend and a proposed peace agreement between the United States and Iran is successfully concluded.
Industry operators say easing tensions in the Middle East have contributed to a sustained decline in international crude oil prices, raising expectations of lower fuel prices in Nigeria.
Crude oil, which had traded above $120 per barrel during heightened geopolitical tensions, has fallen to about $87 per barrel. The decline has strengthened expectations that the cost of petrol, diesel, and aviation fuel may also reduce in the domestic market.
According to industry stakeholders, the falling cost of crude oil is expected to reflect in fuel prices, although the timing of any adjustment will depend on the cost of crude already held by refiners.
A source familiar with operations at the Dangote Petroleum Refinery explained that while current market conditions support a reduction in petrol prices, the refinery is still processing significant volumes of crude purchased at higher prices.
The source noted that petrol could eventually sell for around N900 per litre if crude oil prices remain at current levels or decline further.
Fuel marketers have also expressed optimism that continued stability in the Middle East and the reopening of the Strait of Hormuz would support lower international oil prices, creating room for additional reductions in the pump price of petrol.
Market checks indicate that some fuel marketers have already reduced their PMS ex-depot prices to below the prevailing refinery benchmark, signalling growing competition within the downstream petroleum sector.
Industry observers believe that continued crude oil price declines, combined with increased product availability and ongoing fuel imports, could trigger another round of price competition among suppliers, ultimately benefiting consumers through lower pump prices.
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