The Major Energy Marketers Association of Nigeria (MEMAN) has rejected reports that the pump price of Premium Motor Spirit (PMS) will plummet to ₦300/litre with the start of large-scale production by the Dangote Petroleum Refinery and other local refiners, including modular refinery operators. A recent report suggested that the pump price of PMS could drop to ₦300/litre. The Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria (CORAN), Eche Idoko, believes that with adequate crude oil supply, local refineries can produce PMS at a lower cost, making it possible to sell at ₦300/litre....CONTINUE READING
He accused refineries abroad of exploiting Nigeria and stressed the need to support local refining. He said, “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 N300/litre as the pump price. Why make Nigerians buy it at almost N700/litre when you know that if you allow refineries to work the price will come down? Is it because you want to satisfy the global refiners abroad that are making so much from us?”
However, Tunji Oyebanji, former chairman of MEMAN and CEO of 11 Plc, disagrees with the claim. According to him, the price of petrol cannot drop as low as ₦700 per litre due to the high cost of crude oil, refining, transportation, finance, and distribution margins. Oyebanji cited the example of diesel prices dropping from N1,700 to N1,200/litre after Dangote refinery started production, but attributed this to the exchange rate. He expressed optimism that diesel prices will drop further before December. He said, “We were selling diesel for N1,700 to N1,800/litre, but as soon as Dangote refinery started production he brought down the price to N1,200/litre. What other proofs do you need As I speak to you now there is every tendency that before December diesel prices will drop further. The only reason why diesel is not doing below N1,000/litre is because of our exchange rate. If the exchange rate drops, diesel will drop below the N1,000/litre price. Now the exchange rate concern is because Dangote imports crude. If he is not importing, the exchange rate may not have so much effect, though he is still buying crude in dollars (in Nigeria) anyway.”
