Petrol prices in Nigeria to drop to N300 if the government cooperates with Dangote

Nigerians may soon experience some relief once fuel prices drop as projected. This potential drop would result from the shipment of Premium Motor Spirit (petrol) from Dangote following the start of huge production by the Dangote Petroleum Refinery and other Indigenous producers. The operators of modular refineries projected a decline in fuel pump prices should the government intervene.

A report by the Nigerian newspaper The Punch noted that marketers have started registering with Dangote’s refinery in anticipation of the refinery’s supply of premium motor spirit this month.

As a result, operators of modular refineries estimated that petrol prices could drop from N620 to N300 once Dangote and other local refineries begin supplying refined petrol.

However, these operators also noted that the reduction in petrol prices is completely dependent on government intervention. Without the government ensuring the provision of adequate crude oil to local refiners, the prices would most likely remain high.

Speaking on behalf of the Crude Oil Refinery Owners Association of Nigeria, Publicity Secretary, CORAN, Eche Idoko suggested that what happened to the cost of diesel when Dangote began manufacturing it would happen to petrol prices if it was produced in large quantities in Nigeria.

“A lot of companies today benefit from the importation of petroleum products at the expense of Nigerians,” the Publicity Secretary, disclosed to The Punch newspaper.

“If we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure that we should be able to buy PMS at N300/liter as the pump price,” he added.

The Publicity Secretary refuted the argument that petrol prices could not drop that much by noting that petrol prices would drop immediately if it started being produced in massive quantities by indigenous refiners, and raw materials were being sold in Naira.

“We were selling diesel for N1,700 to N1,800/liter, but as soon as Dangote refinery started production he brought down the price to N1,200/liter. What other proofs do you need? As I speak to you now there is every tendency that before December diesel prices will drop further,” he said.

“The only reason why diesel is not doing below N1,000/liter is because of our exchange rate. “If the exchange rate drops, diesel will drop below the N1,000/liter price. Now the exchange rate concern is because Dangote imports crude. If he is not importing, the exchange rate may not have so much effect, though he is still buying crude in dollars (in Nigeria) anyway,” he added