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The Market is Open

 


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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