Presently, Nigeria consumes an average of 44.3
million litres of petrol per day as compared to 66.7 million litres before
subsidy removal (source: NMDPRA). While the average
cost of petrol in the world today is $1.31 US dollars (source: Global Petrol
Prices), in Nigeria it is $0.503 (source: Global
Petrol Prices). The official exchange rate is N1,469 to $1. A simple
multiplication to that effect leaves the cost of petrol at N757 a litre in the
global market while NNPC is selling at N617 leaving
a difference of N140. I ask a question, is government still paying fuel subsidy?
Meeting the required local demands has
been a long-term issue in the country and the declaration of subsidy removal by
the Tinubu administration on May 29, 2023 hiked up the pump price of petrol
astronomically with its ripple effects on delivery of goods and services and
cost of food. The grand entrance of Aliko Dangote into the oil industry appears
to be a source of relief to the Nigerian populace with the establishment of a
650,000 barrel a day capacity refinery located at Ibeju-Lekki, Lagos State,
which is big enough to meet not just local demands but beyond our shores.
Many at times,
superheroes seem to exist only in our favourite cartoons, movies and
imaginations, life taught us otherwise. We are our own superheroes defeating
the harsh economic realities in Nigeria. Now that we can refine crude oil in
Nigeria, the associated cost with importing petrol has been defeated forever
and we can finally breathe; the excuses of landing cost and the rest will be a
thing of the past in pump price adjustment, or so I thought.
All of a sudden, my interest was aroused by
published articles online on Dangote’s opinion about the Nigeria oil industry,
her players and the stakeholders. He paints a picture of frustration in getting
the required amount of crude to refine from the IOCs, granting
of licenses to fuel importers and the rest. That in itself is a signal to the
stakeholders, a poetry to soothe our minds and
prepare to accept the much-awaited petrol from Dangote refineries. He must
refine and the necessary crude must be sourced. There has to be something to
refine and sell.
I read with keen interest the news published in
Punch on July 2nd, 2024 with the headline "Dangote Fuel: Marketers fear high
priced petrol ahead of supply”. Literally speaking, what
is being communicated is: Dangote PMS won’t come at a give away price, crude
was imported and hence won’t sell at a loss. Sorry Nigerians, don’t hold me
responsible, it's business.
Come what may, at the end of the day, it
is all business and public relations. My expectation for cheap fuel has been
dashed, but one thing is certain: whether they get crude supply from the IOCs or not, it doesn’t hinder Dangote refineries from
doing business. Therefore, it is much ado about nothing. Whatever price they
choose to sell, oil marketers are left with their choice of patronizing whoever
they want based on whatever price they deem fit.
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