The Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), has asserted that the price of petrol produced by the Dangote Petroleum Refinery could fall below N600/litre with the right government interventions. Following his discussion with the Sunday Punch, the news is available for the New Daily Prime. Idoko argues that the current N898/litre price, which the Nigerian National Petroleum Company Limited (NNPC) claims it paid for Dangote petrol, is inflated due to the fluctuating exchange rate. He suggests that pegging the exchange rate at N1,000/$ for locally produced petroleum products could cause this price to plummet to N550.
The view of Idoko’s argument is that the Dangote refinery’s current output is derived from imported crude, even though a portion was sourced locally, both purchased in dollars. This, he contends, necessitates selling the refined product at international prices to ensure profitability.
“If we begin to refine locally and there is a naira sale, the price of PMS will drop. We still stand strongly by that position,” Idoko emphasized.
Despite the current high price, Idoko points out that the NNPC is still saving N300/litre compared to the usual landing cost of imported petrol, which hovers around N1,200/litre. He believes that local refining inherently reduces costs, even without additional government intervention.
Idoko further highlights the potential benefits of a naira crude sale, suggesting it could free up a significant portion of the nation’s foreign exchange currently used to service petroleum product imports. He anticipates a strengthening of the naira against the dollar, which would, in turn, further lower petrol prices.
To achieve a significant price reduction, Idoko recommends that the Federal Government committee on crude sales to local refineries sell the feedstock in naira at a discount and peg the exchange rate at approximately N1,000 to a dollar.
While acknowledging the complexities of the financial sector, Idoko maintains that such measures would lead to a “significant drop in the price.” He revealed that the special committee is actively working on the issue.
Addressing concerns about a potential Dangote monopoly, Idoko assured that the company, now a CORAN member, would adhere to the association’s rules. He expressed confidence in the ability of both CORAN and the NMDPRA to prevent any monopolistic practices.
Idoko’s statements offer a glimmer of hope for Nigerians grappling with high petrol prices. However, the feasibility and potential implications of his recommendations remain subjects of intense debate among industry experts.
