Fuel prices in Nigeria predicted to fall to N650 per litre, analysts explain why

• After weeks of uncertainty astir the naira-for-crude deal, the authorities yet decided to proceed with the policy
• In the aftermath of that decision, Dangote Refinery has shaved disconnected N45 from its substance prices successful 1 week
• But analysts foretell that pump terms of substance successful Nigeria volition spell adjacent lower, up to N650 per litre

Legit.ng writer Ruth Okwumbu-Imafidon has implicit a decennary of acquisition successful concern reporting crossed integer and mainstream media.

In the past week, respective terms drops person occurred since the national authorities announced its determination to proceed the naira-for-crude policy.

In response, Dangote Refinery reduced its ex-depot terms from N880 to N865 per litre, stirring anticipation among Nigerian citizens.

For the 2nd clip successful a week, Dangote Refinery reduced its gantry terms again by N30 to N835, effectual immediately.

Between wednesday past week and wednesday this week, Dangote Refinery's ex-depot terms went from N880 to N835. Photo credit: Dangote Group
Source: UGC

This determination was successful effect to aggregate factors, similar the driblet successful planetary lipid prices, and the landing costs of imported substance dropping beneath the refinery’s price.

The NNPC besides responded with a terms chopped connected Wednesday, and gradually, Nigerians are returning to the terms war, wherever each subordinate tried to connection the champion prices possible.

Naira-for-crude to continue

Even much promising is that the authorities connection confirmed the naira-for-crude argumentation to present beryllium a semipermanent statement aft the earlier suspension.

In its connection past week, the Ministry of Finance noted that the naira-for-crude argumentation is simply a semipermanent strategy to trim dependence connected FX for petroleum, not conscionable a impermanent measure.

Wale Edun, the Minister for Finance, besides stated that a gathering had been held to reappraisal challenges successful implementation and find solutions to alteration sustainable section refining successful the thrust for energy security.

Cheaper substance successful sight

Marketers and stakeholders foretell that arsenic the planetary lipid prices support dropping, Nigerians could spot substance prices clang arsenic debased arsenic N650.

They noted that erstwhile crude prices driblet to astir $50 per barrel, Nigerians could spot substance prices autumn to N800 per litre oregon lower.

As of Wednesday, April 16, Brent lipid had already dropped to astir $65 per tube again.

Landing outgo of imported substance drops successful effect

Amid these developments, marketers dealing successful imported substance person besides indicated that a terms driblet is imaginable successful the coming weeks.

Recall that the landing outgo of imported petrol declined to N853 per litre connected Tuesday, inclusive of each costs, including shipping and logistics.

This placed them successful a presumption to vie with the Dangote Refinery since the terms was beneath the terms offered by the section refinery. But Dangote Refinery responded swiftly with a terms chopped to N835.

Prices could driblet to N700/litre

Mr. Olatide Jeremiah, an lipid and state expert, told The PUNCH that, had it not been for the earlier suspension of the naira-for-crude deal, substance prices could person already dropped to N700 owed to the ongoing terms war.

He added that the abrupt price change from the refinery mightiness make immoderate problems for the depot owners since they whitethorn beryllium forced to merchantability disconnected the aged banal successful their vessel farms astatine breakeven oregon a loss.

But with the renewal of the naira-for-crude coming astatine the aforesaid clip arsenic the diminution successful planetary crude prices, Olatide noted that prices could get to N700/litre successful nary time.

Fuel is simply a halfway request successful Nigeria, and a diminution successful substance terms tin construe to cheaper transport and cheaper food. Photo credit: Contributor
Source: Getty Images

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said successful a telephone chat that if crude terms gets arsenic debased arsenic $50 per barrel, Nigerians tin beryllium definite of buying substance betwixt N650 and N700 per litre.

Ukadike noted that the terms cuts from Dangote Refinery were expected aft the renewal of the naira-for-crude deal, but that the importers, depot owners and different players volition instrumentality much losses successful the fallout.

Cheaper substance expected arsenic landing outgo drops

In related news, Nigerians can expect different driblet successful the pump terms of substance arsenic marketers person rushed to import 156 cardinal litres.

This is due to the fact that of a diminution successful the landing costs, and it is present cheaper than the price offered by Dangote Refinery.

The contention betwixt importers of substance and the Dangote Refinery continues to trigger much terms drops, week aft week.

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Source: Legit.ng