Petrol price may crash to N300 per litre as modular refineries make new moves

The pump price of Premium Motor Spirit (PMS), commonly known as petrol, could potentially decrease to around N300 per litre with the onset of large-scale production by the Dangote Petroleum Refinery and other local producers. This was stated by the operators of modular refineries on Sunday.

The Crude Oil Refinery Owners Association of Nigeria (CORAN), a registered body of modular and conventional refinery companies, emphasized that achieving this price drop hinges on the government’s provision of adequate crude oil to local refiners. They noted that foreign refineries are significantly profiting at Nigeria’s expense.

CORAN’s Publicity Secretary, Eche Idoko, highlighted the positive impact seen on diesel prices once Dangote began production and suggested a similar effect could occur with petrol. He pointed out that if local refineries received sufficient crude oil, Nigerians could see petrol prices drop to N300/litre, compared to the current nearly N700/litre.

Idoko also criticized the current system that benefits international refiners and called for crude oil to be sold to local refineries at the naira equivalent of the dollar rate. This, he argued, would help strengthen the naira and reduce costs for consumers.

Currently, Nigeria has 25 licensed modular refineries, with five in operation and producing various products, including diesel and kerosene. However, many plants face significant challenges, particularly in securing crude oil, which hampers their ability to obtain necessary financing.

In May 2024, Aliko Dangote announced that his refinery’s production plan would eliminate Nigeria’s need to import petrol by June. The refinery, which has already impacted diesel prices, aims to meet the fuel needs of West Africa and beyond.

Oil marketers, like the Independent Petroleum Marketers Association of Nigeria (IPMAN), have expressed optimism about lower petrol prices with local production. However, they noted that specific pricing details from the Dangote refinery are still pending. IPMAN President Abubakar Maigandi stated that marketers are hoping for prices around N500/litre, lower than the current NNPC rate of N565.50/litre.

Regulatory bodies have also indicated support for ensuring a consistent supply of crude oil to domestic refiners, which is expected to further stabilize and reduce petroleum product prices in the country.