NO MORE N1, 300/Litre? SEE What Oil Expert Revealed About Price Of Fuel That’s Worse & Heartbreaking
Despite the recent increase in the price of Premium Motor Spirit (PMS), the Federal Government of Nigeria continues to subsidize the product for local consumption, says Dr. Thomas Ogungbangbe, the Chief Executive Officer of CITA.
He made this statement over the weekend at Murtala Muhammed Airport (MMA) in Lagos, during an interview with aviation journalists. Note that fuel is being sold between N1000 to N1, 300 per litre currently in some parts of the country.
Dr. Ogungbangbe explained that without the government’ s intervention, the price of a litre of PMS could rise significantly, potentially reaching between 80 cents and $1 (about N1, 600).
This means that, even though there has been a price hike, the cost of fuel in Nigeria remains much lower than it would be without the subsidy.
He highlighted that, despite these increases, Nigeria still ranks as one of the countries with the cheapest fuel prices globally. He said the government is still paying a significant amount to subsidize PMS to reduce the burden on Nigerians. ” The government is trying to shield the people from the full impact of the market price by continuing to subsidize the product, ” he noted.
Impact Of Dangote Refinery
Ogungbangbe also addressed the widely held expectation that the Dangote Refinery would lead to lower fuel prices in the country. He clarified that this would not be the case. Instead, the refinery will ensure the availability of petroleum products in the local market but not at a significantly reduced price.
” If Dangote sells a litre of petrol, it will likely be priced at around N1, 200, N1, 300, or N1, 400 to cover costs and make a profit, ” he explained. ” The government is stepping in through the Nigerian National Petroleum Corporation Limited (NNPCL) to manage the price and provide relief to consumers.
Any private entity trying to buy PMS at such a high cost from Dangote and sell at the current lower market price would not be able to make a profit, ” he said.
Call For Full Deregulation
Dr. Ogungbangbe further advocated for the complete deregulation of the petroleum sector. He suggested that introducing more competition in the market would eventually lead to reduced prices.
” Dangote Refinery’ s role is to ensure the availability of fuel, not to lower the price. The refinery is a private business designed to fill the supply gap while generating profit. We should not expect a drastic reduction in fuel prices just because the refinery is locally based, ” he remarked.
He believes the government’ s current ” measured approach” to deregulation is a step in the right direction but recommended that subsidies be removed entirely. According to him, continuing to subsidize PMS at this rate is unsustainable for the government in the long term.
The Future Of Fuel Prices
On the topic of public unrest that might arise if subsidies are completely removed, Dr. Ogungbangbe explained that this is why the government is phasing in changes gradually. ” The government is doing its best to manage the situation carefully, ” he said, ” but Nigerians should still expect further price increases in the future as the subsidy is completely removed. ”
Comparing Nigeria to other countries, he noted that fuel prices are relatively the same, even in countries that produce crude oil. ” In places like the United States, the United Kingdom, and other African nations such as Benin Republic, Zambia, and South Africa, fuel prices are higher than what we are paying in Nigeria. It is essential to appreciate that the government is doing its part to mitigate the impact, ” he concluded.
Dr. Ogungbangbe’ s remarks shed light on the complexities surrounding fuel pricing in Nigeria and the government’ s role in maintaining affordability while navigating economic challenges.