FG Raises Hope, Gives Condition to Crash Petrol Cost From Dangote, Others as NNPC Prices Emerge
- The minister of finance and coordinating minister of the economy, Wale Edun, has expressed optimism about the possibility of a petrol price reduction
- The minister said that the prices can only come down as more refineries begin operation and achieve economies of scale
- The development comes as the NNPC released the price list of the Dangote petrol nationwide
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The minister of finance and coordinating minister of the economy, Wale Edun, has expressed hope for a crash in the fuel pump prices, stating that the Nigerian government is giving parties time to adjust petrol costs.
The development comes amid the lifting of petrol by the Nigerian National Petroleum Company Limited (NNPC) from the Dangote Refinery on Sunday, September 15, 2024.
Source: Getty Images
Edun gives condition to petrol price crash
The minister, who was present at the petrol lifting by Dangote, praised the Dangote Group chairman, Aliko Dangote and his team for the feat.
Edun congratulated the NNPC, the Ministry of Finance, and the Federal Inland Revenue Service (FIRS) chairman for making the lifting possible.
The minister stressed that Nigerians expect energy security and sufficiency and stated that relevant stakeholders will work together to actualise this.
According to the minister, the fuel pump price will ultimately crash as the refinery and others reach total capacity and sustain local petrol distribution.
The New Telegraph reports that the minister said the lifting of petrol from the Dangote Refinery marks a new beginning for Nigeria’s oil industry. The Nigerian government is giving stakeholders in the oil sector an opportunity to reduce petrol prices.
Per the minister, the government expects that as the Dangote Refinery and others ramp up production and scale and achieve more significant economies of scale, there should be the opportunity and potential to reduce costs, which would be passed on to the consumer.
“So, we have to give them a chance. They have just started and have done very, very well,” Edun said.
Dangote Refinery and NNPC disagree on price
Earlier, there was controversy after the release of the NNPC's price list for Dangote petrol, with some states buying the product for as high as N1,000 and others at N950 per litre.
NNPC had said that it purchased the petrol from Dangote Refinery at N898 per litre and adjusted it to earn about N25 per litre.
However, the Dangote Refinery countered the NNPC, saying that it sold the petrol to the company in dollars, below the commodity's import price.
Many Nigerians were surprised by NNPC's price list for Dangote petrol, as they had hoped for a price reduction from the refinery.
Analysts ruled out the possibility of Dangote crashing the price below the market price given that the refinery is a commercial entity and mainly imported the crude oil used in manufacturing the product.
There is no hope for a price crash from Dangote refinery
“Expecting Dangote to crash petrol prices is asking too much. Currently, there is a partial subsidy, and the government will have to offset a part of the price in the form of subsidy,” Adeola Yusuf, Energy policy analyst, told Legit.ng.
He said that NNPC agreed to off-take the Dangote petrol because the refinery would sell it above the market price.
“Remember, the only condition that NNPC gave to lifting the Dangote petrol is that if the refinery is selling above the market price,” he said.
NNPC finally speaks on PH refinery
Legit.ng earlier reported that the group chief executive officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has said the Port Harcourt Refinery would begin operations in two weeks.
During an interactive session with the Senate, Kyari disclosed this on Thursday, March 14, 2024.
Multiple reports disclosed that Kyari assured Nigerians that the delivery date for the refinery and other refineries remains unchanged.
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Source: Legit.ng
