Despite having two operational refineries in Nigeria—the Dangote and Port Harcourt refineries—reactions have remained stalled by the ongoing high price of Premium Motor Spirit, or PMS, as it is usually known as gasoline.
With the opening of the nation’s two refineries, many Nigerians believe that the price of petroleum will drop.
According to sources, President Bola Tinubu declared the elimination of subsidies in May 2023, which led to a significant price disruption in the petroleum business. This was quickly followed by the first increase in the price of gasoline.
The Nigerian National Petroleum Company Limited, or NNPCL, increased the price from N195 to between N448 and N557 per litre following the announcement, representing an 185.64% increase.
However, the federal government justified the increase by claiming that the subsidy, which cost more than N400 billion a month, could not be sustained.
Less than a month later, in June 2023, the price of gasoline increased by 10.77%, from N557 to N617 per liter.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) President Chinedu Okoronkwo said that global economic issues beyond local control were the cause of the increase, which NNPCL attributed to market dynamics.
The price increased by 45.38% to between N855 and N897 per litre in September 2024.
Olufemi Soneye, the Chief Corporate Communications Officer of NNPCL, revealed in a statement that the company was facing significant financial strain, endangering the sustainability of fuel supply. He also said that the increase was the consequence of financial issues, such as large debts owed to fuel suppliers.
The most recent raise came when NNPCL decided to stop acting as a go-between for marketers and the Dangote Refinery.
Direct communication between the refinery and marketers was made possible by this.
As a result, NNPCL and other gas stations raised their pump rates by 15% to N1,030 per liter in order to match refinery costs.
According to reports, Dangote Oil Refinery started producing gasoline after delays brought on by recent shortages of oil.
According to Devakumar Edwin, a vice president at Dangote Industries Limited, the refinery’s gasoline would only be bought by the Nigerian National Petroleum Company Limited, or NNPCL, the nation’s only importer of gasoline.
Concerns regarding the sustainability of Nigeria’s fuel supply were raised when the NNPCL announced a day earlier that it was facing significant financial difficulties as it fights growing debt to gasoline suppliers.
According to the information received, Nigerians were full of hope and excitement for a drop in fuel prices when Aliko Dangote, the Group Chairman of Dangote Industries Limited, announced the formal rollout of Premium Motor Spirit, PMS, also known as gasoline, on Tuesday, September 3, 2024.
The optimism was short-lived, though, as since the Dangote Refinery’s activities began, gas prices have gone up twice.
This supported the assertion made by Olufemi Soneye, Chief Corporate Communications Officer of the Nigerian National Petroleum Company Limited, or NNPCL, that reduced fuel prices are not assured by the refinery’s activities alone.
Soneye asserts that the price of petroleum products from any refinery, including the Dangote Refinery, is set by forces of the world market.
Following extensive restoration, the NNPCL eventually said that the Port Harcourt refinery had resumed production shortly after the Dangote refinery did.
NNPCL stated in a broad celebration that the former Port Harcourt Refinery, which has an established 60,000 barrels per day (bpd) nameplate capacity, would once again produce petroleum products.
Many Nigerians voiced their frustrations to reporters.
Hassan Alowonle, a respondent, claimed that until Bola Ahmed Tinubu, the current president, eliminated the fuel subsidy, Nigerians had enjoyed a small degree of democracy and sound administration for many years.
“The price of the fuel has always been friendly even during the tenure of former President of Nigeria, Goodluck Ebele Jonathan.
“During his time, there was a mass protest over the hike in fuel price but many Nigerians can’t compare the administration with the current government of President Bola Ahmed Tinubu.
“When no refinery was working in the country, the government ensured it subsidized the price of the fuel, giving Nigerians the opportunity to buy PMS at a cheaper rate.
“Even when the immediate former President of the country, Muhammadu Buhari handed the baton to Bola Tinubu, the price of the fuel was N210.
“However, when Nigeria now has functional refineries both in Lagos and Port Harcourt, the price of fuel is sold at the rate of N1,040.
“It is obvious that the current administration is generating revenue at all costs.
“The price of the fuel will keep increasing even if the country has 10 functional refineries unless the government considers the masses and breaks the total dependency of government revenue on crude oil,” he said.
Despite having two operational refineries, Augustine Oyiwona, another respondent, blamed the high cost of fuel on a number of factors, including competition, the nature of Nigerian roads, inflation, the price of oil, production costs, and transportation and distribution costs.
“Fuel price is almost twice as high now that we have two refineries working because fuel prices are influenced by many factors, including Inflation.
“Nigeria’s current inflation rate is 33.8%, which generally affects the purchase of raw materials and other production inputs.
“Another factor is the cost of crude, which is an international commodity and priced in dollars which puts pressure on our local currency.
“Then businesses in Nigeria rely on generators because the country can’t supply enough electricity.
“Manufacturers spend 40% of their production costs on generating energy which is also applicable to Dangote and the refurbished Port Harcourt refinery,” he stated.
According to another respondent, Sylvester Agih, “With respect to the hike in the fuel price despite the existence of two refineries in the country, one side of the argument is that with the removal of subsidy, what Nigerians are paying is the actual cost of the product.
“The other side of the argument is that since we have our own functioning refineries, Nigerians ought not to be paying as much as N1000 for a liter of fuel, especially as costs of importation, including import duties no longer apply.
“There may be other perspectives on the issue but the fact is that it negates common sense that Nigerians who have been paying less when the country was importing fuel are now constrained to pay more even with two functioning refineries.
“Sadly, the government cannot point to any project it has executed with the funds saved from the removal of the fuel subsidy.
“Similarly, the government cannot, in sincerity, claim that the life of the ordinary citizen has been improved following the removal of the fuel subsidy.
“This is why I don’t blame many who have accused the government of corruption and have called for the reversal of the removal of fuel subsidy,” he concluded.
Speaking as well, Ameh Anthony highlighted his dissatisfaction with what he saw as suffering in the face of plenty, claiming that the hardships Nigerians are experiencing as a result of the high price of gasoline are unnecessary.
“Imagine, we have two refineries that are functioning. In other words, petrol is supposed to be very cheap for us, but the reverse is the case.
“We are even suffering more than when we imported refined fuel. Who did this to us?” He asked.
He claims that businesses are also impacted by the spike in fuel prices, which has raised the cost of goods and services and made things more difficult for average Nigerians.
Daniel Mustapha, another respondent, demanded an investigation into the cause of the development.
He said that the best way to halt the period of constant increases in gas prices was to encourage the government and refinery operators to raise production to satisfy local demand, decrease waste, and enhance efficiency.
“These things need to be investigated and appropriate action taken, otherwise, the hike in price would continue unabated and by extension increasing hardship in the country.
“Once the price of fuel is high, it affects every facet of the economy, including those that sell vegetables.
“Our government should be interested in exploring solutions to reduce petrol costs, such as increasing refinery production, improving efficiency, or implementing price control mechanisms.
“The government and refinery operators should provide clear explanations for the high petrol costs and permanently end these things that are suffocating ordinary Nigerians,” he stated.
Adams Ali, on his part, encouraged the federal government to sell crude oil to the two refineries at a price that would allow gasoline to be supplied at a reasonable pump price and, thus, lessen the suffering that Nigerians face.
“There is not much story on this. If Mr. President wants us to buy fuel at N300 in Nigeria, it is very possible.
“We own the crude oil. The Federal Government can sell crude oil to Dangote and Port Harcourt refineries in such a way that they can sell fuel at the rate of N300.
“The government should also block all the loopholes in the oil sector and then face mineral resources like gold and others.
“If fuel price and the cost of clearing imported goods from Customs are cut down, the price of things will come down,” he added.
