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.
It was reported 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 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.
“The price will continue to rise because these middlemen are the elements that want to see that local refining is not sustained. Because when we turned to local refining in this country, we saw the price of petroleum products dropping to as low as N700 plus. And it was going to go down more like we promised you guys. I granted an interview to you guys and said that if local refining is ramped up, the price of petroleum products is going to come down. I was even audacious enough to say that we could even see it drop to as low as N350. And it was heading towards that because if crude drops to $50, for instance, there’s no way that we won’t sell petrol at about N350.
“These are possibilities. Unfortunately, we have middlemen who pride themselves as agents. They have no scheme in the game other than that they have fixed prices because they don’t have risk. All they do is that they connect Nigerian consumers with international traders and then make their money and go away. So, they don’t have anything to lose. They have no investment in this business. They just come in as agents, make money, and then cash out,” he submitted.
