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In April of 2020, the average price of the OPEC basket so far this month is 19.36$ per barrel, while the price was 33.91$ per barrel in March of 2020.
The OPEC basket is a weighted average of prices for petroleum blends produced by OPEC countries in which Nigeria is an active member.
The federal government has remained the sole importer of petrol through the Nigerian National Petroleum Corporation (NNPC), which equally swaps crude oil for the product.
According to the report published March 6, 2020, by the Petroleum Products Pricing Regulatory Agency (PPPRA).
The landing cost of petrol with all cost elements, including the actual cost of product and freight, lightering expenses and other charges, showed that it stood at N89.88 which is a huge slash in price from what it has been previously, yet the federal government still choose to give Nigerians a 13.79 per cent cut selling petrol at N125.
The PPPRA has also released via a press release that in line with government approval of a new pricing regime, effective 19th March 2020, in which there was a provision for the establishment of a price band within which Oil Marketing Companies (OMCs) are expected to sell at the retail stations.
Effective 1st April 2020, there, would be an introduction of the band system where N123.50 per litre – Lower Band (LB) and N125.00 per litre – Upper Band (UB).
“The federal government has now introduced a modulation mechanism – if crude oil prices go down we will see a reduction in petrol prices. If prices go up we will see an increase,” Bashir Ahmed the personal assistant to the president on new nedia said in a tweet.
Fred Tunde of Watchright financials limited said: “The government is shortchanging Nigerians giving us petrol at N125 with a landing cost of less than N90, there is a huge spread they are making with the global oil price splash, lets Nigerians benefit to the fullest.”
Financial Analyst Seyi Kolawole of NASD Plc who also spoke to The ICIR said: “There is a lot more the government can do for citizens this period where the global oil price has crashed.
“Personally I feel petrol should sell for less than N90 at filling stations with an over 70 per cent price drop in average global oil price.”
Phone calls and text messages to Environmental Rights Action (ERA) for comment was unsuccessful.
According to a report by Barrons an investment and financial body, more than $9 billion would be saved by airline companies with the global drop in oil prices, but it won’t do them much good given the drop in passengers.