Nigeria’s N617/litre petrol price cheapest in West Africa

Nigeria’s current pump price of Premium Motor Spirit (PMS) otherwise called Petrol is the lowest among other West African countries, findings have revealed.

Nigeria in the last few months has witnessed drastic change in the oil and gas sector with the total deregulation of the downstream sector.

This had led to a sharp increase in petrol pump prices. The product moved from N190 to N537 and very recently N617 depending on location.

The development has continued to raise reactions from Nigerians and industry stakeholders while prices of household commodities, and transportation among others have continued to soar with the current realities.

But findings carried out by NIGERIAN TRIBUNE show that the price of PMS per litre in Nigeria is the cheapest compared to other countries in West Africa.

According to the July 17th, 2023 data obtained from Global Petrol Prices on 14 countries, Nigeria ranks first, followed by Liberia (N747), Sierra-Leone (N863), Benin (N878) and Ghana (N892).

Others are; Togo (N946), Guinea (N1095), Cote d’Ivoire (N1101), Burkina Faso (N1148), Cape Verde (N1,149) Mali (N1,170), Mauritania (N1,204) and Senegal (N1,337/litre).

Further findings showed that the majority of the listed countries are importers of refined fuel while only few of them own a functional refinery or are oil producing.

Meanwhile, the Global Petrol Prices in a separate document titled “Global fuel prices, a primer,” said the main differences in prices across countries were due to the cost of distributing the final product and taxes.

It said, “The distribution cost, however, is a relatively small component of the price in most countries. Hence, the key difference is taxation and especially the level of excise taxes.

“These are the government levies on each litre or gallon of fuel sold For example, the price difference between the U.S. and Europe is explained largely by the difference in these taxes.”

Also, it identified crude oil prices, exchange rates, seasonality, refining marketing and distribution costs as four key factors that drive short-term fuel price fluctuations.

It described crude oil prices as a significant part of the final retail price stressing that oil prices can double or decline drastically within the scope of a few weeks.

These fluctuations, it said, are reflected in pump prices.

For exchange rates, it said because Oil is traded in dollars, when the domestic currency depreciates, “this makes oil imports more expensive even if crude oil prices are unchanged. The reverse happens when the local currency appreciates: imported oil products become cheaper and fuel prices decrease.

“In fact, the effect on fuel prices of changes in crude oil prices and changes in exchange rates is the same. Whether crude oil prices are 10 percent higher or the dollar is 10 percent more expensive is the same for countries that do not use the U.S. dollar as their currency.”