Nigerians are still experiencing the scathing effects of the removal of fuel subsidy by President Tinubu. However, the president’s Special adviser on Media and Publicity, Ajuri Ngelale, has said that the price of petrol at filling stations will not decrease even if all five Nigerian refineries are fully operational, working at full capacity and producing the most amount of the product. Ngelale made this statement while he was a guest on Television Continental’s talk show, “Your View.”
During the television interview, Ngelale dismissed the idea that having more processing plants will bring down the price of petrol as a myth. He said that it does not happen anywhere in the world. In his words, “Even if we have the most refineries producing the most PMS in the world, you will find that the most prolific PMS producers with their refineries … if you go to see what they are charging in their pump, you will find that it’s no different from those countries that don’t have refineries.”
Petrol price is dependent on global oil prices, he said.
According to the spokesman, the reason why the price of the pump will not go down irrespective of any country’s refining capacity is that nobody spends billions of dollars on building a refinery because of charity or because of corporate social responsibility. The main reason of building such is to make money. This is why, he said, that no matter the number of oil marketers importing the product into the country and no matter the number of refiners producing massive amounts of premium motor spirit (PMS), the price is still dependent on the international benchmark of the cost of crude oil per barrel.
He said that an increase in the price of oil will result in a corresponding increase in the price of petrol at the pump. Similarly, when there is a decrease, the pump price will also decrease in corresponding proportion. “These are market fundamentals that are determined not in one country but on the international stage,” he said. However, Ngelale said that there are benefits to having a functional refinery in the country. President Tinubu already approved the renovation of Nigeria’s processing plants.
Cheap fuel is not one of the benefits of working refineries.
Tinubu has approved the renovation of the Port Harcourt refinery. The president has said that it would come on stream in December 2023. The special adviser also mentioned the Dangote refinery which has already been launched and will be dishing out products soon and the 200,000 barrel-per-day BUA refinery in Akwa Ibom State. While all these have benefits, he said that the benefit is that the administration would have saved the country hundreds of millions of dollars in transportation and logistics costs annually. This is being spent to import refined PMS in to the country.
Ngelale added that Nigeria spends N10 billion a year on foreign exchange paying out to refineries and partners to get the product exchanged from crude to refined PMS. He said that the money would be saved in the central bank as a result of having working local refineries. Evidently, he confirmed that having working oil processing plants has a huge advantage, but one of them is not cheap fuel. This questions the idea of having working oil plants in the first place if there would be no effect in prices.
Panic as marketers announce potential price hike.
Meanwhile, the Nigerian Independent Petroleum Marketers Association (IPMAN) has indicated potential adjustments in the fuel pump price within the nation. Chinedu Okoronkwo, the President of IPMAN, reassured Nigerians during an interview with the media and urged them to remain calm. Presently, the cost of a liter of petrol ranges between N600 and N700. Some have reported buying the product for much more per liter. Concerns have arisen that this price might surge to N1,000, driven by the nearing global crude oil prices to $90 per barrel.