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Petrol price may increase as Brent stabilises around $35/barrel

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BRENT, the oil against which Nigeria’s crude is priced, has hovered around $35 per barrel for about one week, raising concerns of a possible hike in petrol price in Nigeria any time soon.

  An analysis of global oil trading rates yesterday showed that Brent crude traded at $35.61 per barrel as of 9.32am Central Standard Time.

Further findings showed that the commodity appreciated by $0.48 when compared to the previous day’s rate, although crude oil in the Organisation of Petroleum Exporting Countries basket maintained a flat rate of $28.43 per barrel on Monday.

However, global oil figures showed that Brent Weighted Average in the past four days was higher than the commodity’s rate yesterday, as the BWA was put at $36.32 per barrel.

This represented a 2.34 per cent rise in price, indicating a positive movement in the commodity’s cost as more countries begin a gradual relaxing of the COVID-19 lockdown across the globe.

Operators in Nigeria’s downstream sector told our correspondent in Abuja that the increase in oil price was good for the country in terms of foreign exchange earnings.

They were, however, quick to state that this would cause an upward movement in petrol price at fillings stations.

The Petroleum Products Pricing Regulatory Agency had crashed the pump price of petrol from N145 per litre to N125 per litre on March 19, 2020, as it declared the commencement of a market-based pricing regime.

PPPRA further reduced the price to N123.5 per litre in April 2020 due to the crash of crude oil price, as the commodity had traded below $30 per barrel for several weeks.

An impeccable source with the products pricing agency stated that considering the recent rise in crude oil price, it is highly possible to see an upward movement in the price of petrol soon. But price will naturally be adjusted to reflect a true picture of market fundamentals at any particular period, high or low.

The agency’s boss had earlier explained that henceforth, the cost of petrol would be determined by the international market price of crude.

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