Petrol prices in Nigeria will drop steeply amid boom in local production, says CORAN
By Innocent Raphael
The price of Premium Motor Spirit (PMS), commonly known as petrol, is expected to fall to around N300 per litre once large-scale production begins at the Dangote Petroleum Refinery and other local refineries, according to the Crude Oil Refinery Owners Association of Nigeria (CORAN).
This announcement came on Sunday, with officials highlighting the importance of adequate crude oil supply to domestic refineries.
CORAN, representing modular and conventional refinery companies in Nigeria, emphasized that refineries abroad have been profiting significantly from Nigeria’s dependence on imported fuel.
In his remarks, Eche Idoko, CORAN’s Publicity Secretary, assured that with sufficient crude oil, local production could reduce petrol prices significantly. He drew parallels with diesel prices, which dropped when Dangote’s refinery commenced production.
Idoko stressed the importance of supporting local refiners, noting that several companies benefit from importing fuel at the expense of Nigerians.
He also urged the government to facilitate crude oil purchases at naira equivalents to international rates to bolster local production and stabilize prices.
The announcement follows statements from Aliko Dangote, Africa’s richest man, who in May confirmed that Nigeria would cease petrol imports by June 2024, thanks to his refinery’s operations.
Dangote’s refinery is poised to meet West Africa’s fuel needs and significantly impact Africa’s energy market.
Oil marketers on their part, have revealed they are optimistic about reduced petrol prices once Dangote’s refinery starts operations this month..
Infact, the National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, disclosed that he anticipates prices below the current NNPC rate of N565.50 per litre.
Despite the promising outlook, local refiners face challenges, primarily due to the inconsistent supply of crude oil, which has hindered the completion of many modular refineries.
Currently, only five of Nigeria’s 25 licensed modular refineries are operational, producing diesel, kerosene, black oil, and naphtha.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) have acknowledged the need for a reliable crude oil supply to domestic refineries.
Chief Executive of NUPRC, Gbenga Komolafe, highlighted the development of a Domestic Crude Oil Supply Obligation template to ensure consistent supply.
As Nigeria braces for the potential economic impact of local refinery production, stakeholders remain hopeful that the reduced dependence on imported fuel will lead to lower prices and a more stable energy market.
