High fuel prices persist as Nigerians question the impact of the Dangote and Port Harcourt refineries. Public outcry grows over delayed relief.
Reactions continue to emerge regarding the ongoing high prices of Premium Motor Spirit (PMS), or petrol, in Nigeria, despite the presence of two operational refineries: Dangote and Port Harcourt.
Many citizens anticipated a decrease in fuel prices with the commissioning of these refineries. Reports indicate that the initial price surge occurred shortly after President Bola Tinubu’s announcement of subsidy removal in May 2023, which significantly disrupted the petroleum sector.
Following this announcement, the Nigerian National Petroleum Company Limited (NNPCL) increased the price from N195 to between N448 and N557 per litre, marking a staggering 185.64% rise.
The federal government justified this increase by stating that the subsidy, which cost over N400 billion monthly, was not sustainable.
In June 2023, petrol prices rose again from N557 to N617 per litre, reflecting a 10.77% increase attributed to market dynamics. Chinedu Okoronkwo, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed that global economic factors, beyond local influence, were driving this rise.
By September 2024, prices surged by 45.38%, reaching between N855 and N897 per litre. NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, noted that the company faced significant financial pressures that threatened fuel supply sustainability, citing high debts to petrol suppliers as a contributing factor.
The latest price hike followed NNPCL’s decision to cease its intermediary role between marketers and the Dangote Refinery, allowing for direct transactions, which resulted in a 15% increase, bringing prices to N1,030 per litre.
OBASANJONEWS has reported that the Dangote Oil Refinery has initiated petrol processing after experiencing delays due to recent crude oil shortages.
Devakumar Edwin, a vice president at Dangote Industries Limited, indicated that the Nigerian National Petroleum Company Limited (NNPCL), the nation’s sole petrol importer, will be the exclusive buyer of the refinery’s petrol.
This announcement followed the NNPCL’s admission of facing significant financial difficulties, exacerbated by increasing debts to petrol suppliers, which has raised concerns about the stability of Nigeria’s fuel supply.
The announcement from Aliko Dangote, Group Chairman of Dangote Industries Limited, regarding the launch of Premium Motor Spirit (PMS) on September 3, 2024, initially sparked optimism among Nigerians for a potential decrease in fuel prices.
However, this optimism was short-lived as petrol prices have risen twice since the refinery began operations.
Olufemi Soneye, Chief Corporate Communications Officer for NNPCL, confirmed that the refinery’s production does not ensure lower fuel prices, emphasizing that global market dynamics dictate the pricing of petroleum products, including those from the Dangote Refinery.
Following the commencement of production at Dangote, the NNPCL also announced that the Port Harcourt refinery had resumed operations after an extended rehabilitation period.
NNPCL has joyfully announced the restart of petroleum production at the old Port Harcourt Refinery, which has a capacity of 60,000 barrels per day.
However, many Nigerians have expressed their dissatisfaction, as reported to OBASANJONEWS.
Respondent Hassan Alowonle noted that while Nigerians experienced some benefits from democracy and governance in the past, the removal of the fuel subsidy by President Bola Ahmed Tinubu has led to increased fuel prices. He highlighted that during former President Goodluck Ebele Jonathan’s administration, fuel prices were more manageable, and the government provided subsidies even when refineries were non-operational. In contrast, with the current administration, fuel prices have surged to N1,040 despite the existence of functional refineries. Alowonle emphasized that the government’s focus on revenue generation is detrimental to the populace, suggesting that prices will continue to rise unless there is a shift away from reliance on crude oil revenue.
Augustine Oyiwona further attributed the high fuel costs to various factors, including inflation and production expenses, indicating that the current prices are nearly double what they were when only one refinery was operational.
Nigeria’s inflation rate currently stands at 33.8%, significantly impacting the procurement of raw materials and production inputs.
The cost of crude oil, an international commodity priced in dollars, further exacerbates pressure on the local currency.
Additionally, businesses in Nigeria depend heavily on generators due to insufficient electricity supply, with manufacturers allocating 40% of their production costs to energy generation, a situation that also affects companies like Dangote and the refurbished Port Harcourt refinery.
Sylvester Agih noted the paradox of rising fuel prices despite the presence of two refineries in the country.
He argued that the removal of subsidies has led to Nigerians paying the true cost of fuel, yet it seems unreasonable for citizens to pay over N1000 per liter when importation costs, including duties, are no longer a factor.
He emphasized that it defies logic for Nigerians to face higher prices now that local refineries are operational, especially when the government has not demonstrated any tangible benefits from the savings accrued from subsidy removal.
Agih expressed skepticism regarding the government’s claims of improved living conditions for ordinary citizens post-subsidy removal, leading many to accuse the government of corruption and call for a reinstatement of the subsidy.
Ameh Anthony also voiced his frustration, highlighting the suffering experienced by Nigerians amid abundant resources and criticizing the hardships caused by soaring petrol prices.
Two operational refineries should ideally result in low petrol prices; however, the reality is quite the opposite.
The situation has deteriorated to the point where citizens are experiencing greater hardship than during periods of imported refined fuel.
This raises the question of accountability for the current predicament. The rising fuel prices are impacting not only individuals but also businesses, leading to increased costs for goods and services and exacerbating the economic struggles faced by many Nigerians.
Another individual, Daniel Mustapha, has called for an investigation into the underlying causes of this issue.
He advocates for measures that would encourage the government and refinery operators to enhance efficiency, minimize waste, and boost production to satisfy local demand, thereby curbing the relentless rise in petrol prices.
He emphasizes the necessity of thorough investigations and decisive actions to prevent ongoing price increases, which further intensify the economic challenges in the country.
Mustapha points out that elevated fuel prices have a ripple effect across the economy, affecting even the vendors of basic goods.
He urges the government to seek solutions to lower petrol costs, such as increasing refinery output, enhancing operational efficiency, or establishing price control measures.
Furthermore, he insists that both the government and refinery operators owe the public a transparent explanation for the exorbitant petrol prices and must take steps to alleviate the financial strain on ordinary Nigerians.
Adams Ali called on the federal government to sell crude oil to the two refineries at a price that would enable petrol to be sold affordably, thereby alleviating the hardships faced by Nigerians.
He stated that if the President desires fuel prices to be set at N300, it is entirely feasible.
He emphasized that since the country owns the crude oil, the government could facilitate sales to the Dangote and Port Harcourt refineries in a manner that allows them to offer fuel at that price.
Furthermore, he urged the government to eliminate inefficiencies within the oil sector and to focus on other mineral resources, such as gold.
He concluded by noting that reducing fuel prices and the costs associated with customs clearance for imported goods would lead to a decrease in overall prices.
Peoplesmind
