Nigerian Billionaire Tonye Cole Predicts New Petrol Price as PH Refinery Begins Production
- The co-founder of Sahara Group, Tonye Cole, has said petrol prices will not crash to N700 per litre
- He highlighted complexities affecting pricing following petrol production at the Port Harcourt Refinery
- According to him, the price sold in Nigeria is lower than the landing cost, which makes marketers unwilling to import
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Tonye Cole, co-founder of Sahara Group, an energy company, has explained why Nigerian refineries cannot sell N700 per litre or less petrol.
He cited several reasons, including volatile foreign exchange rates as critical factors.
Source: UGC
Cole cites FX volatility
Cole, who spoke on Channels Television on Tuesday, November 26, 2024, highlighted pricing complexities after announcing that the Port Harcourt Refinery has commenced production.
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The refinery operates at 60% capacity and will refine 60,000 barrels of crude oil daily.
It is also expected to complement production at the Warri Refinery.
The billionaire noted that while restarting local refining is essential, imported machinery and FX costs continue to affect pricing.
According to him, the price sold in Nigeria is lower than the landing cost, which makes marketers unwilling to import.
“So, Nigerians are already benefiting from that. Secondly, the volume of consumption in Nigeria has dropped, and as a result of that, the pressure you used to have on foreign exchange has gone down because we’re no longer importing that much.
Cole praises NNPC’s efforts
The Rivers State APC guber candidate in last year’s election cited the naira-for-crude sale arrangement by the Nigerian government and local refineries, saying that PMS would not sell below N700 per litre.
He also stated that the machinery used in refurbishing the Port Harcourt Refinery was imported, saying that factors operators will factor in FX for the imports.
He lauded the progress in achieving local petroleum product refining and said that Nigeria must resolve some issues to stabilise petrol prices.
Marketers hope for a price crash
The development comes as marketers said the beginning of petrol production from the Port Harcourt refinery will deepen competition and ensure price reduction and availability.
The refinery kick-started operations 11 months after it completed mechanical repairs.
The development comes as trucks began loading petroleum products from the facility, showing the commencement of crude oil processing at the plant.
Findings show that about 100 trucks have queued up to lift petrol from the refinery as of Tuesday, November 26, 2024.
Port Harcourt refinery begins fuel distribution
Legit.ng earlier reported that the Nigerian National Petroleum Company Limited (NNPC) says the Port Harcourt refinery has begun loading petroleum products into trucks for onward distribution.
The NNPC disclosed in a statement on Tuesday, November 26, 2024, that the promise to re-stream the refinery has been met.
After a five-year hiatus, legit.ng reported that the refinery began production on Tuesday, November 26, 2024.
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Source: Legit.ng
