Crude price crash: Petrol can drop below N400/litre — Refiners

 Crude Oil Refinery Owners Association of Nigeria has said that the price of Premium Motor Spirit (petrol) can drop below N400 per litre with the current crash in crude oil prices.

CORAN argued that there is no reason petrol should not be sold at NN350 per litre if crude prices eventually fall to $50 per barrel.

However, CORAN said petrol prices will continue to rise despite the crash in crude prices and the reduction in its landing cost.

CORAN feared that unless the Federal Government continues the naira-for-crude deal, the price of petrol will be on the rise even if the price of crude oil falls to $50 per barrel.

The PUNCH reports that oil prices plunged last week to $65 per barrel as the United States import tariffs and an unexpected OPEC+ supply hike erased $10 per barrel from global benchmarks.

The price had appreciated earlier when US President Donald Trump imposed tariffs on any country that buys crude from Venezuela.

However, oil prices turned the corner as of Friday, with Brent falling to $65, the first time since 2021.

According to oilprice.com, the combined effect of Trump’s import tariffs, OPEC+’s inopportune decision to speed up the unwinding of production cuts, and China’s retaliatory actions wiped off $10 per barrel from global oil prices, “with ICE Brent falling below $65 per barrel for the first time since August 2021.”

The US West Texas Intermediate crude futures lost $4.96, or 7.4 per cent to end at $61.99.

China’s retaliatory tariffs on US goods were said to have escalated a trade war that has led investors to price in a higher probability of recession.

China, the world’s top oil importer, announced it will impose additional tariffs of 34 per cent on all US goods from April 10.

According to Reuters, nations around the world have readied retaliation after Trump raised tariffs to their highest in more than a century.

Aside from the tariffs, another factor that further pressured oil prices was the Organisation of the Petroleum Exporting Countries and Allies’ decision to advance plans for output increases.

The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd.

In a bulletin released by the Major Energies Marketers Association of Nigeria, it was disclosed that the landing cost of petrol has dropped from N885 the week before to N865 as of Saturday.

However, despite the landing cost reduction, the ex-depot price of petrol rose from N860 to N900 per litre in Lagos, signalling the failure of the Nigerian market to react positively to the market forces.

In an interview with our correspondent, the Publicity Secretary of the CORAN, Eche Idoko, expressed worry that the price of crude in the international market is reducing but the price of refined fuel in Nigeria is shooting up before the naira has been falling due to pressure.

According to him, the naira-for-crude policy is purely targeted at ensuring energy security for the country and stabilising the strength of the naira.

Idoko lamented that some individuals are still hellbent on continuing a regime of importing substandard petroleum products into the country.