Strong indications emerged at the weekend that Premium Motor Spirit (PMS) prices, popularly called petrol, may crash further in 2025.
Saturday Sun reports industry experts saying that petrol, which sells for between N900 and N950 in many fuel stations, may have its price further crashing to as low as N500 a litre in the year.
According to oil stakeholders, the likely drop in petrol prices in 2025 is premised on a strong downstream sector, which is propelled by the federal government’s deregulation policy.
Industry players attribute the price drop to various factors such as stable foreign exchange policy, price competition, the Naira-for-crude policy, and the start-up of refineries in Port Harcourt, Warri, and Dangote. They also affirmed that the refineries’ selling their products domestically and accepting payment in naira will contribute to price falls.
Last July, the Federal Executive Council (FEC) approved the sale of crude to local refineries for payment in naira.
In addition to this is the rebound of activities by modular refineries, which are now upbeat about the downstream sector and have concluded plans to add petrol refining to their stable of products in addition to diesel, which hitherto was their sole product line.
Nigeria’s daily petrol consumption has hit approximately 40 million litres with local production. According to truck-out data from the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), Dangote Refinery contributes an average of seven million litres. In comparison, NNPCL controls 1.2 million litres, bringing the total to 8.2 million.
Currently, modular refineries produce only diesel. Although the country has about 25 licensed modular refineries, only five operate.
On the contrary, the 125,000 barrels per day Warri Refining and Petrochemical Company (WRPC), which commenced operations a few days ago, operates at 60 per cent capacity and produces Kerosene, Diesel, and naphtha.
Before the Warri refinery’s operations began, the 60,000 barrels per day Port Harcourt Refinery, which began operations over a month ago, injected about 1.4 million litres of petrol via blending with straight-run gasoline, 1.5 million litres of diesel, and 2.1 million litres of LPFO.
According to the Group Chief Executive Officer (GCEO), NNPC Ltd, Mr Mele Kyari, the 150,000 Port Harcourt Refinery 2 is currently undergoing rehabilitation and is at a 90 per cent completion stage, ditto for the Kaduna Refinery, which is also undergoing rehabilitation. However, the presidential source told Saturday Sun that the Kaduna refinery may not come on stream soon due to the huge cost implications and other technical reasons.
Though Kyari had recently said NNPC was no longer importing petrol, major marketers and some private depot owners were still importing about 30 million litres daily to bridge the supply shortfalls.
However, Mr. Ukadike Chinedu, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated in a telephone interview with Saturday Sun that the launch of the Port Harcourt and Warri refineries is a significant development for the downstream sector. It will foster robust price competition, which is already evident.
He said the Nigerian National Petroleum Company Ltd and Dangote have reduced prices in the last three weeks, a signal of the gains of multiple production sources.
