As Nigeria marks its 64th Independence Day celebration, oil marketers, and refiners have expressed optimism that with the kickoff of the Naira-for-crude sale deal between the Federal Government and the Dangote Refinery on Tuesday, the price of Premium Motor Spirit (Petrol) will reduce in the coming weeks and months.
The President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi and spokesperson for the Crude Oil Refiners Association of Nigeria, Eche Idoko disclosed these in separate interviews on Monday.
Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, Zacch Adedeji and the Chairman of the Federal Inland Revenue Service confirmed that all is set for the Tuesday, October 1, 2024, kick-off of the crude oil sale in Naira deal to Dangote Refinery through the Nigerian National Petroleum Company Limited.
The confirmation of the deal’s commencement comes after President Bola Ahmed Tinubu gave the approval in July 2024.
The price of petrol has a significant effect on the cost of transportation in Nigeria.
It is then believed that lower prices of petrol following the implementation of the Naira-for-crude deal will directly impact the cost of transportation and then also affect the prices of goods and services across the country.
Crude sale in Naira to Dangote Refinery will reduce Petrol Prices – IPMAN
Giving insights on the benefits of the Naira-for-crude deal, Maigandi said its proper implementation will in the long run reduce the price of PMS for Nigerians.
He said, “Yes everybody expected that the price of fuel will drop with the commencement of Crude oil sale to Dangote Refinery in Naira.
“Tuesday is October 1, we will wait and see the outcome. There will be a reduction in the Dangote Petrol Pump price in the future. I can’t say to what extent but no matter how small it is, the price will be cut down”, he told DAILY POST.
Naira will appreciate massively against dollar – CORAN
On his part, Idoko said apart from the petrol price reduction impact, the Naira-for-crude will lead to the appreciation of Naira against the dollar in the coming days and months.
He stressed that the intervention will dovetail into petrol price reduction at the end of the day.
“There are several other factors that will affect price apart from foreign exchange.
“Selling in Naira to Dangote Refinery and other modular refineries and the discounts are reasonable, it will reduce the pump price of petrol.
“First and foremost, when crude is sold in Naira, the first thing we will see is that in a couple of months or few weeks, we will witness the appreciation of Naira against the dollar at the FX market.
“In terms of the price, with crude in Naira deal, there will be several discounts which will affect the bottom line. The intervention will dovetail into petrol price reduction at the end of the day”, he said.
Hardship amid Nigeria’s 64th Independence Day
This comes as Nigeria with an estimated 250 million population marks its 64th Independence Day amid economic hardship occasioned by high energy costs, inflation, interest rate, persistent foreign exchange crisis and widening infrastructural deficit.
From the 1960s when Nigeria was freed from the shackles of colonialism, the price of petrol has skyrocketed from around 4 kobo to between N950.22 and N1,100 per litre in September 2024.
Also, Nigeria’s annual inflation rose from N5.44 percent in 1960 to 32.15 percent in September, 2024.
This is as Naira fell against the dollar from N0.658 in 1972 to N1541.97 per dollar.
Similarly, the interest rate rose from 7 percent in 1960 to 27.25 percent in 2024.
All these negative economic indicators had caused over 150 million Nigerians to slip into the poverty index compared to 39 million recorded in 1992. Indeed, Nigeria has continued to struggle despite its rich human and mineral resources.
Hardship won’t last – Petrol Marketers to Nigerians
Amid Nigeria’s economic travails, Maigandi told Nigerians to bear with the government, noting that the hardship will not be permanent.
According to him, the Government’s Compressed Natural Gas Initiative is a viable solution to ending the country’s energy crisis.
“Bear the situation. Nothing is permanent. The government is planning to diversify to bring solutions to the country’s energy crisis with the Compressed Natural Gas Initiative.
“With CNG, the petrol pressure will reduce, same with transportation costs”, he said.
Disappointing 64 years in Nigeria’s oil, gas sector – Idoko
Idoko said that despite the disappointing years after the discovery of crude in Nigeria, there is still hope on the horizon for the country’s progress in the oil and gas sector.
“Unfortunately since the discovery of oil in Oloibiri, other contemporaries of Nigeria have used the oil wealth to develop their countries like Saudi Arabia, United Arab Emirates, Kazakhstan and Norway but we have not been able to do the same as you can see.
“Truly, Nigeria has mismanaged its oil wealth post-Oloibiri. However, there is hope for a new era with new conversion around energy transitions, and energy self-sufficiency.
“I hope it won’t be too late. Summarily in the last 64 years, we have not done well with our oil wealth”, he said.
Fuel pump price hikes under Tinubu
In September 2024 Nigerians woke up to buy fuel between N950 and N1,100 per liter nationwide after NNPCL announced fresh prices following the lifting of Dangote Petrol on September 15, 2024.
The State-owned oil firm had revealed that it bought Dangote Refinery Petrol at N898 per liter but the $20 billion worth of refinery disagreed.
Dangote Refinery asked Nigerians to wait on the Adedeji-led committee to reveal the price of its product upon commencement of crude sale in the Naira deal.
Recently, the President of Dangote Group, Aliko Dangote said its petrol is cheaper than imported one, but did not mention the price of his petrol.
This comes as members of the House of Representatives asked Dangote Refinery to reveal the price of its petrol.
On their part, petroleum marketers said they expect a decision from Dangote Refinery over direct petrol lifting.