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Marketers of refined petroleum products predict that petrol and diesel prices may drop due to the recent slump in crude oil prices. However, they caution that the drop may not be immediate, as it depends on the stability of the new low prices.
Crude prices fell below $60 per barrel over the weekend, after hovering around $65 per barrel on Friday. As of Monday, the benchmark Brent was trading at $59.80 per barrel, while West Texas Intermediate traded around $56.71 per barrel.
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According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, “The price of petrol may come down, but it might not be soon. Oil speculators will look at the stability first and the factors that brought the price down.” He added, “If the factors are natural, they will not look at bringing down the price. If it is an artificial factor that can definitely be ratified, they will also leave it and watch.”
Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria, explained that some refineries had bought crude before the prices went down. “Some of these things are the input values that should be able to create a low and high, but it doesn’t take just that same speed to impact the system because there’s always crude feed that has been there before; either it’s a higher price or a lower price.”
Gillis-Harry further stated, “But if it’s a lower price, sometimes it’s easy to think it’s better to increase the price now so that you can have money to buy more crude. But the projection will always be that once there is a price fluctuation, it will naturally affect the input cost and therefore also affect the output prices that will be sold from the retail outlets.”
The recent drop in crude prices has triggered fears about the feasibility of the 2025 budget, which projected a crude oil price of $75 per barrel. The prices are now over $10 below the proposed price.
OPEC+ decided to accelerate its output hikes, causing concerns about more supply coming into a market with an uncertain demand outlook. This led to oil prices falling by more than $1 a barrel on Monday
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Mazi Nwokpor Jonathan
