N650 Per Litre: Analysts See NNPC, Dangote Crashing Petrol Again as Crude Oil Price Declines
- Crude oil prices are falling but the value of the naira in relation to the dollar is steady on the global exchange market
- This occurred in the midst of rumors that OPEC+ will proceed with its April oil production hike
- According to analysts, the pricing war between Dangote refinery and the NNPC could result in a drop in price
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
As the naira remains stable versus the dollar in the international currency market, crude oil prices are declining.
Source: Getty Images
Amid speculations that OPEC+ will move forward with a planned increase in oil supply in April, oil prices dropped roughly 2% to a 12-week low this week.
United States West Texas Intermediate crude dropped $1.39, or 2%, to close at $68.37, while Brent futures dropped $1.19, or 1.6%, to settle at $71.62 a barrel.
Channels reported that WTI and Brent closed at their lowest levels since December 9 and December 6, respectively.
According to reports, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, have agreed to move on with their April oil output rise.
Nigerians however expect that the decline in crude oil prices will be reflected in fuel prices, to influence more decline in prices.
In addition, they implied that the price war between the NNPC and Dangote refinery may cause the price to drop to between N650 and N800 per litre.
Financial analyst and Chief Economist at SPM Professionals, Paul Alaje, in a Channels Television interview said that the coexistence of Dangote Refinery and NNPCL in their current form benefits Nigerians.
“We, in fact, want more of the competition to go on because this is the consequence of deregulation. I should be buying fuel between N650, N750, and N800 per litre. But if any of them fizzles out, be ready to buy at over N1000 per litre again,” he said.
Naira declines
Meanwhile, in the parallel market, the value of the Naira increased from N1,515 to N1,512 per dollar on Tuesday to N1,512 on Wednesday.
Source: Getty Images
But on the Nigerian Foreign Exchange Market (NFEM), the value of the Naira dropped to N1,505 per dollar.
According to data released by the Central Bank of Nigeria (CBN), the naira depreciated by N3 on Tuesday, February 5th, as the indicative exchange rate increased to N1,505 per dollar from N1,502 per dollar on Tuesday.
As a result, the difference between the NFEM rate and the parallel market dropped from N13 to N7 per dollar on Tuesday.
Dangote to refund Nigerians buying its petrol at higher prices
Legit.ng reported that Dangote Petroleum Refinery has announced it will refund customers who purchased Premium Motor Spirit (PMS) also known as petrol at rates higher than its advertised prices from key distributors, following its recent price reduction.
The company stated that the refund applies to fuel purchased from its partners, including Ardova Plc, Heyden, and MRS filling stations throughout Nigeria.
Dangote refinery recently reduced its ex-depot price for petrol from N890 per litre to N825 per litre.
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Source: Legit.ng
