By Punch Editorial Board
The start of petrol production at Dangote’s Refining and Petrochemicals complex in Lagos marks a significant development for Nigeria. However, the initial enthusiasm has been tempered by recent events. The refinery’s launch coincided with a 66% increase in petrol prices, following the National Oil Company (NNPC Ltd.)’s revelation that it could no longer sustain subsidies on imported petrol.
On September 3, NNPC raised petrol prices from N568 and N617 per litre to N855 and N897/l across regions, with independent marketers adjusting to between N900 and N1,200/l. This price hike suggests a deal between Dangote Refinery and the Federal Government to sell crude oil in naira, eliminating costs related to imports such as freight, insurance, and taxes, which previously pushed the landing cost to N1,117 as of June.
Nigerians now face a tough choice between better fuel availability and higher costs. The official price increase, coupled with NNPC’s admission of a $6 billion debt to fuel suppliers, has led to suspicions that this scenario was engineered to end fuel subsidies.
The refinery’s entry was expected to resolve fuel shortages and stabilize prices, but recent developments have done little to alleviate the financial strain on consumers. The government must ensure transparency and fair market practices to regain public trust. While Dangote’s refinery could eventually lead to price reductions and improved market conditions, the current situation has sparked significant backlash, including concerns over inflation and living costs.
The refinery holds the potential to transform Nigeria’s industrial landscape, providing substantial economic benefits such as job creation and reduced dependency on fuel imports. However, its impact will depend on the government’s ability to manage the transition effectively and address public concerns transparently.
News Editor