Motorists Demand Lower Fuel Costs as Global Crude Prices Drop

Many motorists in the Federal Capital Territory (FCT) have expressed concern over the high cost of fuel despite a drop in global oil prices.

According to them, many filling stations across the FCT are yet to adjust their fuel pumps to reflect the drop in prices.

The price of crude oil in the global market has dropped from $150 per barrel to below $80 per barrel due to the de-escalation of the crisis between the U.S. and Iran.

This development prompted the Dangote Refinery to reduce its petrol gantry price by N75 per litre after crude oil prices fell below $80 per barrel.
Checks revealed that some filling stations, such as MRS, had adjusted their pump prices to between N1,241 and N1,261 per litre, while other retail outlets charged between N1,335 and N1,360 per litre.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) had urged fuel importers to reflect the drop in global crude oil prices.

The National President of PETROAN, Billy Gillis-Harry, said the recent drop in global crude oil prices offered an opportunity to pass the savings from lower crude costs to consumers.

Chinedu Ukadike, the national publicity secretary of the Independent Petroleum Marketers of Nigeria (IPMAN), attributed the development to financial risks.

According to him, high operating costs, among other factors, are also reasons many filling stations have not reduced their pump prices.

Mr Ukadike said the delay was largely driven by supply-and-demand dynamics, as marketers who purchased fuel at higher prices could not immediately adjust their pump prices without incurring substantial losses.

He noted that under the current deregulated system, there was no government compensation mechanism to cushion marketers against losses from sudden price changes.

Mr Ukadike said the financial burden on marketers had increased significantly due to the rising capital required to purchase petroleum products.

“The amount of money needed to buy petroleum products today is far higher than it was in the past.

“At the same time, interest rates on bank loans remain high, insurance costs are increasing, and the overall cost of doing business continues to rise,” he said.

To address the challenges facing the downstream petroleum sector, he said there were several measures to improve price stability and reduce risks across the supply chain.

Mr Ukadike recommended establishing a petroleum or energy bank to provide financing for petroleum product purchases.

According to him, such an institution will work directly with refiners and marketers to absorb market risks, facilitate product distribution, and promote stability in fuel pricing.

He urged the federal government to introduce additional incentives that would support independent marketers and help keep fuel prices affordable for consumers.

“Fuel distribution affects every sector of the economy. When fuel prices rise, transportation costs increase and inflation spreads across society.

“Government policies should therefore focus on promoting affordable energy while ensuring energy security,” he said.

He said that the domestic refining capacity would enhance competition, diversify supply sources, and contribute to greater price stability in the petroleum sector.

(NAN)