Some oil marketers have denied rumors circulating in the media that local crude oil refining might drive down the price of gasoline at the pump to as low as ₦300 per litre.
Under the auspices of the Major Energy Marketers Association of Nigeria (MEMAN), oil marketers responded to a report (Not Channels Television) stating that when the Dangote Petroleum Refinery and other local producers, operators of modular refineries, begin mass production, the pump price of Premium Motor Spirit will drop to approximately ₦300/litre.
They emphasized that foreign refineries were taking advantage of Nigeria, but they also pointed out that this would only be possible if the government made sure that local refiners had access to enough crude oil.
According to reports, the Crude Oil Refinery Owners Association of Nigeria (CORAN) Publicity Secretary, Eche Idoko, told the reporter, “Many companies today benefit from the importation of petroleum products at the expense of Nigerians.”
“I can assure you that we should be able to buy PMS at N300/litre as the pump price if we begin to produce PMS today in large volumes, provided there is adequate crude oil supply,” the speaker continued.
Why force Nigerians to pay nearly N700 per liter when you know that the price will drop if refineries are allowed to operate? Is it your intention to appease the foreign refiners who profit greatly from us?
However, Tunji Oyebanji, the current Chief Executive Officer of 11 Plc and a former chairman of MEMAN, stated in an interview with Channels Television on Monday that the price of gasoline could not fall as low as ₦700 per litre.
“A barrel of crude oil contains 159 liters. A barrel is currently worth roughly $80. That multiplied by 1,400 yields 1400 x 80 = ₦112,000 for a barrel of crude oil. After dividing ₦112, 000 by 159, the amount of ₦702 per litre of crude is obtained. No distribution margins, refining, transportation, or financing costs. ₦702 is just regular crude, he stated.
Oyebanji’s position runs counter to the CORAN executive’s contention that a sharp decline in the price of gasoline is unthinkable due to the fact that crude oil, the primary ingredient in PMS, is priced in US dollars.
“We were selling diesel for N1,700 to N1,800 per litre, but as soon as the Dangote refinery began operations, he lowered the price to N1,200 per litre,” he stated. What more evidence is required?
As I speak with you now, there is every indication that diesel prices will continue to decline before December. Our exchange rate is the only reason diesel is not selling for less than N1,000 a litre.
The price of diesel will fall below N1,000 per litre if the exchange rate declines. Dangote imports crude, which is the current source of currency rate issue. The currency rate might not matter as much if he is not importing, but he is still purchasing crude in Nigeria in dollars.
Africa’s richest man, Aliko Dangote, declared on May 18, 2024, that Nigeria would no longer require gasoline imports as of June of this year, in accordance with the Dangote refinery’s established plans.
Additionally, Dangote has claimed that his refinery could supply all of West Africa’s demands for gasoline and diesel, as well as aviation fuel. Speaking at the Africa CEO Forum Annual Summit in Kigali, he expressed hope for changing the continent’s energy situation.
“As of now, Nigeria has no reason to import anything but gasoline (petrol), and by the end of June, Nigeria shouldn’t import any gasoline at all—not even a single drop of a liter—within the next four or five weeks,” the billionaire said.
Furthermore, earlier in the year, Dangote slashed the price of diesel at the pump to N1,200/litre while the commodity was selling for between N1,700 and N1,800/litre.
He even lowered the price to less than N1,000 per litre, but the rising exchange rate made it impossible for him to maintain this level of pricing. Eventually, the refinery brought the price back to N1,200 per litre.
