CEO Lists Reasons for Hike in Petrol Prices Despite Supplies From Dangote Refinery
- Robert Dickerman, CEO of Pinnacle Oil & Gas Limited, has urged the federal government to address economic imbalances and rebuild the trust of foreign investors
- The CEO of Pinnacle Oil & Gas Limited, Robert Dickerman, has recommended that the federal government address economic imbalances and the trust of foreign investors
- Dickerman urged Nigerians to temper their hopes that the Dangote Refinery, which produces 650,000 barrels of gasoline per day, will result in significant drops in gas prices
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Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Robert Dickerman, CEO of Pinnacle Oil & Gas Limited, has advised the federal government to address economic distortions and international investors' confidence to reduce the country's pump price of fuel, as the price of Premium Motor Spirit is still rising despite supplies from Dangote Refinery.
Source: Getty Images
Dickerman asked Nigerians to reduce their expectations that the 650,000 barrels per day Dangote Refinery will bring substantial reductions in petrol prices in the country, and he also ascribed the rising cost of petrol and other commodities in Nigeria to the devaluation of the local currency.
Speaking at the Nigerian Association of Energy Correspondents' (NAEC) 2024 annual conference with the theme "Gas As Energy Transition Fuel: Navigating Nigeria's Trilemma of Finance, Energy Security, and International Politics," the managing director of Pinnacle made the statement in Lagos.
The Nigerian National Petroleum Company Limited (NNPCL), the only importer and off-taker of gasoline from Dangote Refinery, recently announced price adjustments that have caused gasoline to sell for between N850 and N1,000 per litre, and even more in some places.
However, giving his opinion on the local production and supply of gasoline, Dickerman encouraged the federal government to solve the underlying economic issues in order to bring about reduced pricing across the nation.
In particular, he stated that among other things, the government needed to establish fiscal prudence, boost tax income, attract foreign investment in jobs and local production, and rebuild confidence in Nigeria's economy and currency throughout the world.
He claimed that these were the only ways to bring down the cost of petroleum items in Naira.
He stated,
“Finally, now that we all know the global market price for any oil commodity is dollar-based, and must be converted to Naira at the Naira/USD exchange rate, we also know that the large majority of price increases we have seen in the past year are not because of government policy, price gouging or product hoarding, nor are they due to an increase in the price of crude oil. They are due to the fall in value of the Naira. Every drop in the Naira raises the cost of anything imported or market priced, whether it is gasoline or manufactured goods or food.
“We must address the root problem, which is how to restore global confidence in Nigeria’s economy and currency, create foreign investment in jobs and local production, increase tax revenue and achieve fiscal prudence.That is the only way to lower petroleum products prices in Naira.”
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However, he asserted that Nigerians must give up on the idea that Dangote production will result in significant price reductions in the country, calling into question the logic of the $20 billion refinery's supposed below-market sales.
Dickerman added,
“Bear in mind that the refinery can also export to vessels at market price in USD ex-refinery or even deliver to other countries directly. So if you own a business that can sell a product at x all day to one customer, why would you sell it at a lower price to another customer? The only sensible strategy for Dangote is optimisation, as it would be for any investor and operator.”
FG confirms date crude-for-naira deal with Dangote refinery
Legit.ng reported that the federal government has announced that it has started selling crude oil and other refined products in naira.
Commencing on October 1, 2024, the initiative was unveiled without any further details on the terms of the contracts or the cost of the products.
Recall that a few months prior, the Federal Executive Council, headed by President Bola Tinubu, authorized the purchase of petroleum products in naira and the sale of crude oil to regional refineries in naira, according to the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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