Nigeria’s petrol prices might take a sharp dip to as low as N900 per litre in the next few days depending on how the US-Iran peace agreement negotiations and fall in oil price.
It has become evident that recent developments in the Middle East have resulted in a fall in prices of crude. At its peak in April, due to the US-Iran crisis, crude was selling for above $120 but now it has dipped to as low as $87 per barrel, prompting speculations of cheaper petrol, diesel, and kerosene in the near future.
The potential opening up of the Strait of Hormuz, one of the major oil routes in the world, could further stabilize oil prices and bring about the much-needed fall in price levels.
Recall that the earlier rise in oil prices resulting from the US-Iran conflict which commenced from February 28 had pushed petrol prices in Nigeria from N830 to over N1,300 per litre.
In this light, the question now arises regarding the likelihood of further reductions in the prices at local refiners’ pumps, especially at the Dangote Petroleum Refinery.
In May, the refinery reduced the cost of petrol at its gantries to N1,250 per litre after the crude oil fell to below $100 per barrel.
But analysts say that price adjustments may not come quickly because of crude stocks bought earlier at higher costs.
Even then, industry experts are convinced that petrol can drop as low as N900 per litre if oil prices continue to decline.
Fuel marketers are equally upbeat. The PETROAN has predicted that petrol can fall below N1,000 per litre when supply chains resume.
The association argues that petrol was being sold at about N800 per litre before the outbreak of hostilities in the country.
Some fuel marketers have already reduced depot prices in what could be the first sign of an impending price war amid favorable oil trends.
The world awaits to see how the US-Iran talks pan out to deliver relief at petrol pumps across Nigeria.
