Dangote and Port Harcourt Refineries have made Nigerians express frustration over the persistent high cost of fuel despite the country having two functional refineries.
The price of Premium Motor Spirit (PMS) has surged significantly, with the most recent increase reaching N1,030 per liter.
The first price hike occurred in May 2023, shortly after President Bola Tinubu announced the removal of fuel subsidies.
The Nigerian National Petroleum Company Limited (NNPCL) raised the price from N195 to between N448 and N557 per liter, a 185.64% increase.
The federal government defended the hike, citing the unsustainable cost of subsidies, which exceeded N400 billion monthly.
Since then, the price of fuel has continued to rise, with the NNPCL attributing the increases to market dynamics and global economic factors.
The most recent surge followed the company’s decision to step back from its role as a middleman between marketers and the Dangote Refinery, leading to a 15% increase in pump prices.
Many Nigerians are disappointed, as they expected the presence of functional refineries to lead to lower fuel prices.
Some attribute the high cost to factors such as inflation, the cost of crude, production costs, and transportation and distribution costs.
Others argue that the government’s removal of fuel subsidies has led to the price increase.
Key Factors Contributing to High Fuel Prices by Dangote;
– Inflation: Nigeria’s current inflation rate of 33.8% affects the purchase of raw materials and production inputs.
– Cost of Crude: As an international commodity priced in dollars, crude oil puts pressure on the local currency.
– Production Costs: Manufacturers spend 40% of their production costs on generating energy due to the country’s inability to supply enough electricity.
– Global Market Forces: The pricing of petroleum products is determined by global market forces, affecting refineries like Dangote.
Nigerians are calling for the government to explore solutions to reduce petrol costs, such as increasing refinery production, improving efficiency, or implementing price control mechanisms.
Some also urge the government to sell crude oil to refineries at a rate that would allow for affordable pump prices.
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