Much Ado About Local Refinery with Higher Fuel Pump Price?

By Francis Ugwoke
For many Nigerians, the past one year has been very traumatic. Perhaps, the wealthy politicians, other Nigerians and few others with access to free money, may not understand. And so the more Nigerians complain, the more they are hit again and again. With oil subsidy removal the pump price has witnessed three times increase in about a year and few months. This has taken a toll on the general life of the people. The scenario has been very devastating to many businesses and therefore the people. The fuel price increase has also led to continued slide in the nation’s currency, Naira, against other foreign currencies. Inflation rate has more than tripled within a short space of time. For international traders who require foreign currencies for imports, it is really a nightmare. As one importer puts it, it is a time when many businessmen are faced with uncertainties, either one continues or crashes. And who cares? How much does government care practically except with assuaging promises? Those who remain in business of imports do so at higher risk and have had to also make sacrifices. Members of the Manufacturers Association of Nigeria (MAN) have all cried out. So far, such cries have been with no avail. The consequence is that prices of all goods have continued to triple daily. Nigerians are at the receiving end and many are dying. Prices of food items and drugs have more than tripled. Before the coming on board of the Dangote Refinery, many had hoped that it will end the sufferings associated with importation of refined petroleum products and payment of oil subsidies. There were initial reports that the oil importers were working against the take-off of Dangote Refinery because of the effect on imported products. In other words, the locally refined fuel is supposed to be cheaper than the imported ones. This led to the allegation that some oil cabals did not want Dangote Refinery to take off. While this controversy went on, the federal government intervened and offered the local Refinery crude oil in Nigerian currency. This policy decision was a welcome development with Nigerians believing that it will in turn be felt in the prices of fuel to be offered by the Dangote Refinery. But Nigerians have been disappointed. They are currently in a dilemma as they now pay more for the locally refined fuel as against what the situation was before. The official price of fuel now is N998/litre from N868/litre. But retail stations sell at N1,030 per litre. Some even sell at N1200, and one expects that if it becomes scarce, fuel could go to N1,500 per litre. In the South East, fuel is selling at N1,400 per litre.
For many Nigerians, a lot of things are not adding up, not clear enough, that they pay more for fuel refined here than those imported into the country. This is even when the federal government waived the international requirement of paying for crude oil supplied to Dangote in dollars. So Nigeria does not earn foreign exchange from these crude oil products sold to Dangote which is okay. This has led to the question: what is then the joy in having a local refinery in our own country? Is there anything government and the local refinery have not explained to Nigerians?. Why can’t oil refined in Nigeria be cheaper than the ones refined overseas with all the logistics and risks involved in affreightment down here? An analyst recently argued on Arise TV on why price of fuel should not be more than N400 per litre in local refinery. He pointed out that the N600 Freight on Board (FOB) added to Dangote fuel price should not be since the crude product did not come from another country. He equally argued that if this and other frivolous shipping charges are taken away, Nigerians should be enjoying low fuel cost.
The big question is whether this is going to be the future of local oil refining in Nigeria as many plan to come on board? Is this a conspiracy by the oil cabal? This ugly economic scenario requires the urgent attention of President Bola Ahmed Tinubu and his economic team. The Chief Executive Officer of Dangote Refinery should also come out and help Nigerians to have affordable fuel price as speculated he had earlier planned before the meddling on the issue by the NNPCL which must have been to protect the competitiveness of imported petroleum products. Nigerians need to be saved from this jinx. While some wealthy Nigerians may not feel the effect, the downtrodden should be allowed to breath.

• 
• 
• 
• 

About Post Author