Refinery Remodel: Immediate Drop In Petrol Prices Not On The Horizon, Experts Caution

Refinery Remodel: Immediate Drop In Petrol Prices Not On The Horizon, Experts Caution....KINDLY READ THE FULL STORY HERE▶

Several oil and gas experts have indicated that the operationalization of both the Port Harcourt and Dangote refineries might result in a slight decrease in the prices of petroleum products but not a substantial crash in prices. These insights were shared during an interview with journalists in Abuja on Sunday…..CONTINUE READING

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The experts emphasized that certain secondary expenses, such as freight and port charges, would likely be reduced to achieve this marginal cost reduction.

The Federal Government officially announced the mechanical completion and flare start-up of the Port Harcourt Refining Company Limited (PHRC) on December 21, with its phase two expected to commence in 2024, according to Sen. Heineken Lokpobiri, the Minister of State for Petroleum (Oil). The PHRC consists of two refining units, with the old plant having a refining capacity of 60,000 barrels per day (bpd) and the new plant 150,000 bpd, totaling 210,000 bpd.

Responding to these developments, Olanrewaju Aladeitan, an Associate Professor of Energy and Natural Resources at the University of Abuja, acknowledged the likelihood of a marginal reduction in petrol prices due to the elimination of certain ancillary costs. However, he cautioned against expecting a significant crash in prices, citing the Petroleum Industry Act’s provision for commercially negotiated crude oil supply based on international market prices.

Yushau Aliyu, an Economic Expert, expressed optimism about the refinery’s mechanical test as a positive signal of progress in addressing the deficit in Premium Motor Spirit (PMS). He anticipated a short-term reduction in pump prices at NNPC Ltd.’s retail stations.

An anonymous oil and gas expert criticized the government’s preference for importing fuel instead of fixing local refineries, pointing to potential sabotage within the sector. The expert emphasized the need for operationalizing all refineries, including those in Warri and Kaduna, to assess the impact on fuel prices.

It’s worth noting that the pump price of fuel has risen to N660 per litre at various fuel stations since the removal of subsidies in May 2023, leading to increased hardships for Nigerians due to inflation and rising costs of goods and services.

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