According to a report by The Punch, Nigerian marketers are eagerly registering with Dangote’s refinery, anticipating the upcoming supply of premium motor spirit (PMS) this month.
Operators of modular refineries project a significant decrease in petrol prices, potentially dropping from N620 to N300 per liter, once Dangote and other local refineries start supplying refined petrol. However, this optimistic forecast hinges on government intervention. Ensuring an adequate supply of crude oil to local refiners is crucial; without it, prices are unlikely to decrease.
Eche Idoko, Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria (CORAN), shared insights with The Punch. He compared the potential impact on petrol prices to the reduction in diesel costs when Dangote began producing it.
“A lot of companies today benefit from the importation of petroleum products at the expense of Nigerians,” Idoko stated. He emphasized that producing PMS locally in large volumes, given sufficient crude oil supply, could bring the pump price down to N300 per liter.
Idoko highlighted the tangible impact seen with diesel prices, which fell from N1,700 to N1,200 per liter after Dangote’s refinery started production. He anticipates further reductions, potentially below N1,000 per liter, provided the exchange rate stabilizes.
“The only reason why diesel is not doing below N1,000 per liter is because of our exchange rate. If the exchange rate drops, diesel will drop below the N1,000 per 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,” Idoko explained.
As Dangote’s refinery gears up to supply premium motor spirit, there is cautious optimism that petrol prices could significantly decrease. The key to this potential lies in the government’s ability to ensure a steady supply of crude oil to local refiners, which could transform the market and provide financial relief to Nigerians.
