Government Interventions Could Lower Dangote Petrol Prices To Below N600/Litre – Refiners

Government Interventions Could Lower Dangote Petrol Prices To Below N600/Litre – Refiners....KINDLY READ THE FULL STORY HERE▶

With appropriate government interventions, the price of petrol from the Dangote Petroleum Refinery could drop below N600 per litre, according to crude oil refiners. Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, expressed confidence that local refineries, including Dangote, can reduce petrol costs significantly…..CONTINUE READING 

Idoko explained that the N898 per litre reported by the Nigerian National Petroleum Company (NNPC) reflects the current exchange rate. He asserted that if the exchange rate were pegged at N1,000 per dollar for locally produced petrol, the price could decrease to around N550.

He noted that the petrol sold by Dangote has been refined from both imported and locally sourced crude oil, which was purchased at international prices. Even at N898, he pointed out that the NNPC is buying at N300 less than the typical landing cost of nearly N1,200 per litre.

Idoko emphasized that a local naira sale of crude would release approximately 40% of the foreign exchange currently used for importing petroleum products. He suggested that the government should sell crude to local refineries in naira at a discounted rate and set the exchange rate at N1,000 to the dollar. This strategy could lead to a significant reduction in petrol prices.

Idoko urged cooperation between the NNPC and local players like Dangote, framing them as partners in addressing the energy crisis rather than adversaries. He criticized the levies and taxes imposed on petrol prices, which can account for 25-30% of the cost, suggesting these should be reconsidered to ease the burden on consumers.

He also analyzed the pricing structure, indicating that a litre of petrol could be priced at N550 if the government eliminated levies and set a favorable exchange rate. Idoko expressed optimism that the government could effectively manage the dollar rate for this intervention, facilitating a price cap under N600 for up to 36 months.

In response to NNPC’s announcement that petrol from Dangote would be sold above N1,000 per litre in some northern states, Dangote Group disputed NNPC’s figures, claiming they misrepresented the cost to undermine their efforts in addressing energy challenges.