Government Interventions Could Lower Dangote Petrol Prices Below N600/Litre, Say Refiners

Experts from the Crude Oil Refiners Association of Nigeria (CORAN) have asserted that with appropriate government interventions, the price of petrol from the Dangote Petroleum Refinery could fall below N600 per litre.

Eche Idoko, CORAN’s Publicity Secretary, emphasized that local refineries have the potential to significantly reduce petrol costs. He explained that the N898 per litre price reported by the Nigerian National Petroleum Company Limited (NNPC) reflects current exchange rate challenges. Idoko projected that this price could drop to N550 if the exchange rate is adjusted to N1,000 to one dollar for locally produced products.

Idoko clarified that the petrol being sold by Dangote was produced from both imported and locally sourced crude, noting that the international price significantly impacts selling costs. He explained that a substantial portion of the crude supplied to Dangote comes from NNPC, with the rest being imported at international prices.

He stated, “The current pricing is a direct reflection of international market rates, minus shipping costs. Local refining can mitigate some of these expenses, leading to lower prices for consumers.”

Idoko urged the government to implement a naira-based pricing strategy for crude sales to local refineries, which could involve selling crude at a discounted rate while pegging the exchange rate at N1,000 per dollar. He believes this could lead to a marked decrease in fuel prices, benefiting consumers.

Highlighting the role of levies and taxes, Idoko noted that around 25-30% of the current petrol price is attributed to government fees. He argued that reconsidering these levies could provide relief to consumers, especially in a challenging economic environment.

Idoko also emphasized the need for collaboration between NNPC and local refiners, suggesting that mutual support could enhance Nigeria’s energy sector and stabilize fuel prices.

Recent statements from NNPC indicate that petrol prices sourced from Dangote could exceed N1,000 per litre in some regions, with prices varying across the country. The Dangote Group has previously contested NNPC’s claims regarding pricing, calling them misleading.

As discussions continue, the industry anticipates formal announcements from the government regarding pricing strategies aimed at stabilizing fuel costs.