Following predictions that the price of petrol, which jumped from N143 to N162, last week, may likely increase anytime, experts have revealed that it could only be avoided when the Petroleum Industry Bill, PIB, is passed into law and Dangote Refinery commences operations.
The good side, especially to government, is that total deregulation enables it to save huge subsidies, which the Minister of State for Petroleum Resources, Timipre Sylva, last week, estimated at trillions since the new regime started. Crude price at $46 per barrel just pushed petrol price to N162.What this means is that as crude price rises in the international market, petrol price in Nigeria will go up, perhaps far beyond the current level.
The refinery is expected to commence operations next year with a capacity of 650,000 b/d of crude oil. Stakeholders are unanimous in their opinion that subsidy regime should end because it ‘breeds corruption’ and the bulk of the money that the country should have spent on infrastructure goes into subsidising petrol price.
”What government may now be doing is to monitor prices of PMS in the market so that marketers do not sell at prohibitive prices. ”Price of petroleum could be brought down to reasonable levels if government can boost local refining capacity and this it can do by signing the Petroleum Industry Bill, PIB, which would attract foreign and even local investors.
He noted that Nigerian National Petroleum Corporation, NNPC, was actually doing the country a favour by fixing the ex-depot price at N151.56 per litre. You can’t subject yourself to the dictates of the market on a product that you produce, that you have both comparative and competitive advantage. And they are trying to present the issue of refining petroleum products as if it is rocket science, the answer is no.