The pump price of petrol produced by the Dangote Petroleum Refinery may drop below N600/litre with the right interventions by the Federal Government, crude oil refiners have said. Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, expressed optimism that local refineries like Dangote can reduce petrol costs.
Idoko stated that the N898/litre claimed by the Nigerian National Petroleum Company Limited (NNPC) as the price it bought petrol from Dangote reflected the rising exchange rate. However, he noted that if the exchange rate is pegged at N1,000/$ for locally-produced petroleum products, the price would drop to N550.
“If you remember, we did say that if we begin to refine locally and there is a naira sale, the price of PMS will drop. We still stand strongly by that position,” Idoko said. He emphasized that NNPC is buying at N300 below the usual landing cost of almost N1,200/litre.
Idoko advised the Federal Government committee working on crude sales to local refineries to sell the feedstock in naira at a discount and peg the exchange rate at about N1,000 to a dollar. He also condemned the imposition of levies and taxes on PMS prices by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
According to Idoko, if the government removes levies and taxes and sells crude at a discount, the product will be below N600/litre. He noted that this is achievable if the government intervenes by way of naira sales and pegging the dollar exchange rate for crude transactions at a reasonably low rate.
