Abuja, Nigeria, June 10, 2024 – The pump price of Premium Motor Spirit (PMS), commonly known as petrol, is expected to decrease to around N300 per litre once the Dangote Petroleum Refinery and other indigenous producers commence massive production, according to operators of modular refineries. They emphasized that this reduction hinges on the government providing adequate crude oil to local refiners, highlighting that foreign refineries are currently overcharging Nigeria.
Under the aegis of the Crude Oil Refinery Owners Association of Nigeria (CORAN), industry operators explained that the price drop observed in diesel following Dangote’s production will similarly occur with petrol once it is produced domestically on a large scale. CORAN, a registered association of modular and conventional refinery companies in Nigeria, stated that local production could significantly reduce petrol prices.
“A lot of companies today benefit from the importation of petroleum products at the expense of Nigerians,” said CORAN’s Publicity Secretary, Eche Idoko. “If we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure you that we should be able to buy PMS at N300 per litre as the pump price. Why make Nigerians buy it at almost N700 per litre when you know that if you allow refineries to work, the price will come down? Is it because you want to satisfy the global refiners abroad that are making so much from us?”
Idoko dismissed arguments that such a price drop is impossible due to the dollar pricing of crude oil, insisting that massive domestic production would lower petrol prices. He cited the example of diesel prices, which fell from N1,700-1,800 per litre to N1,200 per litre after Dangote’s refinery began production, despite current prices being affected by exchange rate fluctuations.
On May 18, 2024, The PUNCH reported that Africa’s richest man, Aliko Dangote, announced that Nigeria would no longer need to import petrol starting June, following the planned production commencement of the Dangote refinery. Dangote had expressed optimism that his refinery could meet the fuel needs of West Africa and the continent’s aviation sector.
Speaking on Sunday, Idoko reiterated the call for the sale of crude oil to local refiners at the naira equivalent of the dollar rate, stressing that strengthening the naira would benefit the country. “Get crude to local refineries, allow crude purchase in naira equivalent, make the environment business-friendly and watch locally produced petroleum product prices crash,” Idoko stated.
Nigeria currently has 25 licensed modular refineries, with five operational, producing diesel, kerosene, black oil, and naphtha. However, others face significant challenges due to the unavailability of crude oil, which has stalled financing for construction.
Oil marketers also anticipate a reduction in petrol prices with local production. Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed hope that the Dangote refinery’s petrol production would lead to prices around N500 per litre, lower than the current Nigerian National Petroleum Company Limited (NNPCL) rate of N565.50 per litre.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) spokesperson, George Ene-Ita, confirmed that the government has guidelines to ensure crude oil supply to domestic refiners. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has also developed a template to guide domestic crude oil supply, ensuring consistent provision to local refineries.
In conclusion, the commencement of massive production by local refineries, led by the Dangote Petroleum Refinery, is poised to significantly lower the pump price of petrol in Nigeria, provided there is adequate crude oil supply to these refiners.