Brent, the oil against which Nigeria’s crude is priced, continued its fall in price with oil marketers in the country projecting that such a persistent plunge in global oil prices could lead to a reduction in petrol pump price.
Industry figures showed that global oil prices maintained their steady decline as Brent dropped to $62.92/barrel as at 6.18pm last Thursday, shedding 0.24/barrel when compared to the previous day’s cost.
The commodity has been falling in price after attaining a high cost of $70/barrel last month.
Early in March 2021, Brent rose to a high of $70/barrel, which was the highest price in more than a year, but it had been dropping in price since then and had hovered around $60/barrel on most occasions.
Reacting to the development, oil marketers in Nigeria stated that the fall in international crude oil prices could lead to a reduction in petrol price soon.
They, however, told our correspondent in Abuja on Thursday that this would have been more pronounced if the downstream sector of Nigeria’s oil industry had been fully deregulated.
When asked whether the drop in global crude oil prices would warrant a possible decrease in petrol price in Nigeria, the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, responded in the affirmative.
He, however, noted that the dollar exchange rate was also a factor that affected petrol price.
He said, “We foresee a drop in petrol price but it will also have to do with the exchange rate of the dollar. In as much as the government is trying to reduce dollar for the importation of petroleum products, it will definitely affect the price of commodities.
“This is because the forex rate is also part of what is being used to increase or decrease the price of petrol. So once crude oil price is going down, you can get petrol price reduction but you will also use the forex rate instrument of measurement to determine this.”
Also, the President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said petrol price would definitely move in accordance with international price of crude oil when the downstream sector was deregulated.
“Let the market forces determine the price of petroleum products and that can be achieved when we have full deregulation. So, there shouldn’t be any fear to deregulate the downstream sector,” he stated.
Gillis-Harry noted that crude oil price was a significant determinant of petrol price and urged the government to fully deregulate the downstream oil sector so that Nigerians would enjoy the benefits of a deregulated market.