By Milcah Tanimu
Operators of modular refineries in Nigeria have suggested that the price of Premium Motor Spirit (PMS), commonly known as petrol, could fall to around ₦300 per litre once the Dangote Petroleum Refinery and other local producers commence large-scale production. This prediction hinges on the government’s ability to provide sufficient crude oil to local refineries, thereby reducing dependence on foreign refineries.
The Crude Oil Refinery Owners Association of Nigeria (CORAN) emphasized that achieving this price reduction is feasible if the government supports local refiners with adequate crude oil supply. CORAN, a registered association of modular and conventional refinery companies in Nigeria, communicated through their Publicity Secretary, Eche Idoko, that mass production of PMS could significantly lower the pump price, benefiting Nigerian consumers instead of importers.
Idoko pointed out that the current high petrol prices, nearly ₦700 per litre, are due to the dominance of foreign refineries in the supply chain. He argued that allowing local refineries to operate at full capacity would lead to substantial price reductions. “If we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure you that we should be able to buy PMS at ₦300/litre as the pump price,” he stated.
Addressing concerns about the dollar pricing of crude oil, Idoko asserted that petrol prices would decline once local refiners start producing on a large scale. He cited the recent reduction in diesel prices as an example, noting that the price dropped from ₦1,700-₦1,800 per litre to ₦1,200 per litre after the Dangote refinery began production. He anticipated further drops in diesel prices, contingent on improvements in the exchange rate and domestic crude oil supply.
Aliko Dangote, Africa’s richest man and owner of the Dangote refinery, has also expressed optimism about the impact of his refinery on Nigeria’s fuel market. He stated that with the refinery’s operations, Nigeria would no longer need to import petrol by June this year. The refinery is expected to meet not only Nigeria’s but also West Africa’s petrol and diesel needs, along with aviation fuel demand across the continent.
Despite initial reductions, the price of diesel has fluctuated due to currency exchange rates, underscoring the need for crude oil purchases to be made in naira. CORAN has advocated for the sale of crude oil at the naira equivalent of the international dollar rate to stabilize local fuel prices. Idoko emphasized, “Get crude to local refineries, allow crude purchase in naira equivalent, make the environment business-friendly, and watch locally produced petroleum product prices crash.”
Nigeria currently has 25 licensed modular refineries, with five operational and producing diesel, kerosene, black oil, and naphtha. Approximately ten refineries are in various stages of completion, while the remaining have been granted establishment licenses. The implementation of these strategies is expected to significantly transform Nigeria’s energy landscape and reduce fuel prices for consumers.
