Victor EzejaThe Independent Petroleum Marketers Association of Nigeria (IPMAN) has stated that Premium Motor Spirit (PMS), also known as petrol, is not cheap in Nigeria.
IPMAN spokesperson, Chinedu Ukadike, stated this while reacting to comments made by the President of Dangote Group, Alhaji Aliko Dangote, that petrol is cheaper in Nigeria than in other countries in the West African region.
Join our WhatsApp ChannelDangote had while speaking during the commissioning of Lekki Deep Sea Port Access Road last week, said petrol is not expensive in Nigeria when compared to the prices in other West African countries.
“Some people here in Nigeria might think that petrol at less than N900 is expensive, but there is nowhere in West Africa where petrol is not selling above $1, which is N1,600,” Dangote had said.
He attributed it to the naira-for-crude policy, which allows the sale of crude and refined petroleum products in naira.
Reacting to that, Ukadike pointed out that because Nigeria is a crude oil producer, petrol at its current price is expensive in the country.
“I agree that petrol is cheaper here than in neighbouring countries. But most of those countries don’t produce crude oil and don’t refine in local currency. Nigeria does both. That should reflect in the price,” Ukadike said.
Prime Business Africa reports that the ex-depot price of petrol at Dangote Refinery currently stands at N825 per litre while its distribution partners sell at N875 in Lagos, N885 in South-west, N895 in North-west and North-central, N905 in North-east and South-east.
The IPMAN spokesperson argued that the exchange rate is a key factor in determining the price of PMS in Nigeria.
He said that based on what he gathered about the refinery production costs and the landing at the depot cost, petrol should not be up to N800 in line with the current dollar rate.
He urged the Dangote refinery to further reduce its ex-gantry price to about N770.
READ ALSO: Dangote Refinery Further Reduces Petrol Ex-depot Price To N825 Per Litre Amid Intense Competition
“On my part, I don’t feel it’s cheap. I think the petrol will go as low as around N770. That’s my own permutation,” Ukadike stated.
“I’m not an expert in oil refining. But with what I have gathered — the refinery production costs and the landing at the depot cost, petrol should not be more than N780 or N750, in line with the dollar rate. Now the rate is around N1,600 per dollar; should it appreciate further, PMS from Dangote Refinery should be N750 per litre.”
He pointed out that if the exchange rate dropped from N1600 to about N1200, the price would drop to less than N750 per litre.
“At the current exchange rate of about N1,600 to the dollar, PMS is understandably high. But if the naira gains to around N1,200 or N1,100, it will have a significant impact. You’ll see petrol selling well under N750,” he said.
The Africa’s richest man had also said that Nigerians currently pay around 55 per cent of what citizens in neighbouring West African countries pay for petrol, claiming that his refinery helped to bring down prices and make fuel available.
The IPMAN spokesperson agreed that one of the biggest achievements of the Dangote refinery is eliminating fuel scarcity nationwide. He, however, urged the company to focus on further price reduction as the naira stabilizes at the foreign exchange market.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
