DPR Explains Why Petrol Price Could Rise to N1,000 in Nigeria
- Nigerians should prepare to pay as much as N1,000 to buy petrol if the fuel subsidy is finally removed by the Federal Government
- Sarki Auwalu, the Director of Department of Petroleum Resources, said there's a need to provide an alternative to fuel before removing subsidy
- Auwalu said the gas industry needs more investment in order for Nigerians to convert their internal combustion engine to gas usage
The Department of Petroleum Resources (DPR) has stated that the cost of Premium Motor Spirit could be as high as N1000 amid debate on fuel subsidy.
There have been talks that the Federal Government should remove fuel subsidy, with the Minister of State for Petroleum, Timipre Sylva, campaigning for the removal.
Discussing the impact of subsidy on Nigerians, DPR Director, Sarki Auwalu, said there's a need for alternative before the removal of subsidy.
Source: Getty Images
Auwalu said without alternative to fuel, Nigerians will be subjected to higher prices, adding that providing an alternative could see people buying fuel at about N1,000 per litre at petrol stations.
How Nigeria can provide alternative to fuel
According to Auwalu, the available alternative to fuel is gas, but it will cost $3.2 billion to convert the eight million public vehicles to use gas.
He explained that there's 22 million cars in the country, and to convert each cars to gas engine, it will cost an average of $400. Auwalu said environmental investors can invest to boost usage.
Auwalu said providing such alternative will reduce the cost burden on Nigerians, adding that:
“Once that is achieved, you will see that PMS can be sold at N1,000. After all, the average distance covered by one-gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility is 2.7 against one. One for PMS, 2.7 for LNG or CNG.
"So, with that advantage, you will see that it creates an opportunity for this industry again. The issue of subsidy, the volume will all vanish and that is what we are working towards.”
Sylva wants Nigerians to pay more for fuel
In related news, Legit.ng had reported that the minister says he isn't a fan of fuel subsidy as it has been dragging the country back.
Sylva says subsidising fuel cost for Nigerians is impacting the revenue of the government, and even if refineries are rehabilitated, subsidy will still make the refiner run on loss.
He said a cost reflective price should be adopted for fuel consumers if the government is to make profit from the oil industry.
Source: Legit.ng
