Fuel Price Set to Drop as Petrol Landing Cost Falls Below N800 Per Litre

 

In a development that could bring relief to millions of Nigerians grappling with rising living costs, the landing cost of Premium Motor Spirit (PMS), popularly known as petrol, has once again decreased, dipping below the N800 per litre mark. As of March 19, 2025, industry reports indicate that this reduction—driven by competitive pressures and favorable global market trends—may soon lead to lower pump prices across the country, offering a glimmer of hope in Nigeria’s volatile fuel market.

Petrol Landing Cost Hits New Low

The latest figures from the Major Energies Marketers Association of Nigeria (MEMAN) peg the current landing cost of imported petrol at N797.66 per litre, down from N817.82 per litre just weeks ago. This drop of N20.16 per litre reflects a broader decline that has seen costs fall from over N900 earlier in 2025. The landing cost encompasses the expenses involved in importing petrol, including the international price of the fuel, shipping charges, import duties, and other logistical fees, all calculated against an exchange rate of approximately N1,517 to the dollar and a Brent crude oil price hovering around $70 per barrel.

This reduction comes amid a notable shift in Nigeria’s downstream oil sector, where competition between importers and local refiners, particularly Dangote Refinery, is reshaping pricing dynamics. The refinery, which began supplying petrol domestically in 2024, recently adjusted its ex-depot price to N815 per litre, a move that appears to have pressured importers to lower their costs to remain competitive. With imported petrol now landing at N797.66 per litre, the stage is set for a potential price war that could benefit consumers.

Why the Decrease Is Happening Now

Several factors are driving this latest drop in landing costs. Globally, crude oil prices have softened, with Brent crude declining from its 2024 highs, providing a cheaper base for refined petrol. While the naira’s exchange rate remains a challenge—currently fluctuating around N1,500 to the dollar—the impact of lower crude prices has offset some of the currency’s depreciation. Additionally, the increased availability of locally refined fuel from Dangote Refinery has introduced a new layer of competition, compelling importers to adjust their pricing strategies to protect market share.

The deregulation of Nigeria’s fuel market, fully implemented in 2023 under President Bola Tinubu’s administration, has also played a role. By removing subsidies, the government shifted pricing to market forces, allowing supply and demand to dictate costs. While this initially led to sharp increases in pump prices, the current downward trend in landing costs suggests that deregulation could yield periodic relief when global and local conditions align favorably.

Will Nigerians See Cheaper Fuel Soon?

The big question on the minds of commuters, transporters, and households is whether this reduction will translate to lower prices at filling stations. Current retail prices range from N860 to N1,025 per litre, depending on location and vendor—figures that exceed the new landing cost by a significant margin. Industry analysts are cautiously optimistic, predicting that pump prices could fall to around N800 per litre in the near future if marketers pass on the savings.

However, the transition may not be immediate. Marketers with existing stocks purchased at higher costs might delay price adjustments to minimize losses, a practice that has frustrated consumers in the past. Posts on X reflect this skepticism, with some Nigerians questioning why previous drops in landing costs didn’t fully reflect at the pump. Others point to logistical costs—such as transportation from depots to stations—as a potential barrier to immediate price cuts, particularly in remote areas.

Still, the competitive pressure from Dangote Refinery could force a quicker response. The refinery’s ability to supply millions of litres domestically has disrupted the monopoly once held by importers, and its recent price reductions have already prompted some stations, like MRS in Lagos, to sell at N860 per litre. If imported petrol continues to land below N800, marketers may have little choice but to lower retail prices to stay competitive.

A Game-Changer for Nigeria’s Economy?

The implications of this development extend beyond the fuel pump. Cheaper petrol could ease the burden on Nigeria’s inflation-weary populace, where transportation and energy costs heavily influence the price of goods and services. Small businesses, reliant on generators due to unreliable electricity, might see reduced operating expenses, while commuters could enjoy lower transport fares—a rare respite in an economy still adjusting to subsidy removal.

For the government, this trend could bolster its narrative that deregulation, though painful initially, can yield benefits over time. However, it also puts pressure on regulators like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure transparency and prevent price gouging, a recurring complaint among citizens.

What’s Next?

As Nigeria’s fuel market continues to evolve, the interplay between global oil prices, exchange rates, and local refining capacity will remain key determinants of petrol costs. For now, the drop below N800 per litre offers a promising signal, but its ultimate impact hinges on how swiftly and fairly marketers respond. Consumers are advised to monitor pump prices in the coming weeks, while policymakers may need to step in to ensure the benefits reach the masses.

This latest reduction in petrol landing costs underscores a pivotal moment for Nigeria—a chance to turn a deregulated market into an opportunity for affordability, if only the system can deliver on its promise.