The Independent Petroleum Marketers Association of Nigeria (IPMAN) has stated that the Dangote Refinery should sell Premium Motor Spirit (PMS) at approximately N770 per litre, significantly lower than the current ex-depot price of N825 per litre.
IPMAN spokesperson, Chinedu Ukadike, made this assertion on Monday while responding to recent comments by business magnate Aliko Dangote, who had claimed that Nigeria's petrol prices are relatively inexpensive compared to regional averages.
Exchange Rate Impact on Fuel Pricing
According to Ukadike, the current exchange rate is a critical determinant of PMS pricing in Nigeria. He explained that a reduction in the exchange rate from N1,600 to approximately N1,200 per dollar would naturally drive down petrol prices below N750 per litre.
"On my part, I don't feel it's cheap. I think the petrol will go as low as around N770. That's my own permutation. I'm not an expert in oil refining. But with what I have gathered — the refinery production costs and the landing at the depot cost, petrol should not be more than N780 or N750, in line with the dollar rate," Ukadike stated.
He further emphasized, "Now the rate is around N1,600 per dollar; should it appreciate further, PMS from Dangote Refinery should be N750 per litre. So, if the dollar can come down to N1,200, I want to tell you that the price of PMS at the pumps will go below N750."
Dangote's Position on Fuel Pricing
Aliko Dangote recently claimed that Nigeria's petrol price is 55 percent below the West African average and insisted that fuel is not expensive in Nigeria. This comes as Nigerians currently purchase petrol at between N875 and N910 per litre in major cities like Lagos and Abuja.
IPMAN's position challenges this assertion, suggesting that as a crude oil-producing nation, Nigeria should benefit from more competitive fuel pricing, particularly with local refining capacity now available through the Dangote Refinery.
The ongoing debate highlights the complex factors affecting fuel pricing in Nigeria, including exchange rates, production costs, and the potential benefits of domestic refining capacity.
BenriNews reports that this development comes amid concerns about inflation and the cost of living crisis affecting many Nigerians.
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