Deborah Akinyosoye
Nigerians may face another round of increases following a sustained rise in crude oil prices on the international market, especially after the upward adjustments in the pump price of petrol three days ago.
The price of Nigeria’s Bonny Light crude rose to $70.30 per barrel from $64 per barrel last week, representing an increase of about 10 per cent and the highest level recorded this year.
Similarly, the price of Brent crude, which is used to benchmark other crude grades, rose to $70.15 per barrel from $66 per barrel, while Murban crude increased to $68.01 per barrel from $65.20 per barrel.
Earlier in the week, petrol stations had marked up their pump prices to an average N850 per litre, up by about 14.3 per cent from N750 it sold on Monday, attributing the price hike to the rise in crude oil price.
The Dangote Refinery and oil marketers had also justified increases in global crude oil prices, explaining that crude oil is the main determinant of input cost.
But while crude oil price increased by 6.2 per cent, the local retail price increased by 14.3 per cent, indicating that local oil companies more than doubled the rate of increases in their main input cost, crude oil.
The rise in crude prices led to a 14.3 per cent increase in the gantry price of petrol at the Dangote Refinery, which rose from N699 per litre to N799 per litre.
Following the adjustment, petrol retail outlets in Abuja and Lagos as well as other parts of the country, also raised their pump prices.
NNPC Retail outlets also increased the price to N835 per litre from N815, while other marketers implemented steeper hikes. AYM Shafa, for instance, raised its pump price from N815 per litre to N900.
Speaking on the pump price increases, National Public Relations Officer, Independent Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike, blamed the hike on rise in crude oil price.
He said: “Crude oil price has increased. The refiners have also increased their price. Once your buying source increases, you will increase. Dangote has increased by over N110.”
On why marketers raised pump prices while still having old stock, he said: “When did the crude oil price go up? It is not the first day that it went up. So, that is the nature of the business. Even if we sell our old stock, we can’t buy a new one at the old price. The margin is high. The buying rate and margin is high.
“The marketers have to find a way to see how they can be able to continue to be in business.”