Mohamed Garba
Nigerian consumers may soon experience a reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, as global crude oil prices continue their downward trend.
This development is attributed to weaker-than-expected demand and increased production from non-OPEC+ countries, leading to a surplus in the global oil market.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) recently decided to postpone planned production increases. Initially scheduled to commence on January 1, 2025, these increases have been deferred to April 1, 2025, extending over an 18-month period until October 2026. This strategic move aims to stabilize prices amidst the current market glut.
As of December 2024, U.S. crude traded around $68.75 per barrel, while Brent crude stood at $72.57 per barrel. These suppressed prices have benefited consumers globally, with U.S. gasoline prices dropping to near $3 a gallon, the lowest in two and a half years.
In Nigeria, where the economy is heavily reliant on oil revenues, the decline in global crude prices presents both challenges and opportunities. While reduced oil income could impact national revenue, consumers are likely to benefit from lower petrol prices at the pump. The Nigerian National Petroleum Corporation (NNPC) is expected to adjust PMS prices in line with global market trends, providing much-needed relief to motorists and businesses alike.
Industry analysts caution that while lower petrol prices are advantageous for consumers, the government must navigate the potential fiscal implications carefully. Balancing consumer relief with sustainable economic policies will be crucial in maintaining fiscal stability during this period of fluctuating oil prices.
As the global oil landscape continues to evolve, Nigerian consumers are advised to stay informed about potential changes in fuel prices and plan accordingly.