The price of Premium Motor Spirit (petrol) may be on a downward slope if the crude oil prices continue to slip.

The PUNCH reports that this will also be strengthened as the naira maintains its stability against the dollar in the foreign exchange market.

Oil prices fell about two per cent to a 12-week low this week amid reports that OPEC+ will proceed with a planned oil output increase in April.

Brent futures fell $1.19, or 1.6 per cent, to settle at $71.62 a barrel, while the United States West Texas Intermediate crude fell $1.39, or two per cent, to settle at $68.37.

Reuters reports that those were the lowest closes for Brent since December 6 and WTI since December 9.

It was reported that the Organisation of the Petroleum Exporting Countries and allies like Russia, known as OPEC+, decided to proceed with a planned April oil output increase.

Players in the Nigerian downstream oil sector have said the crude oil price and the exchange rate are the major determiners of the costs of refined petroleum products.

Last week, the Dangote refinery reduced its ex-depot PMS price from N890 per litre to N825.

The Nigerian National Petroleum Company Limited followed suit by matching Dangote’s price, sparking what many described as a price war.

An economist, Paul Alaje, said the price slash of petrol is sustainable and that it should go below N700 per litre considering the current market realities.

With the fall in prices, Alaje said the only challenge will be if the price of crude oil goes up in the international market due to a global crisis.

“It is sustainable to reduce petrol prices to N700 based on today’s reality of the exchange rate. The challenge we may have is a global crisis that makes the price of crude oil go up. If that happens, we are going to see the difference. But for now, we are seeing relative stability,” Alaje said on Channels Television.

He added, “As of today, our computation reveals that PMS should be around N795 to N820 per litre.”

The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, has insisted that the price of petrol will continue to fluctuate based on the foreign exchange rates and international crude oil prices.

However, as lower crude oil prices mean affordable fuel for an average Nigerian, the current price is below the $74 per barrel projected by the Federal Government in the 2025 budget.