The Major Energy Marketers Association of Nigeria, MEMAN, has refuted reports that the pump price of Premium Motor Spirit (PMS) will drop to ₦300/litre, as Dangote Petroleum Refinery and other local refiners, including modular refinery operators commences large-scale productions.
The Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria (CORAN), Eche Idoko, revealed that with adequate crude oil supply, local refineries can produce PMS at a lower cost, making it possible to sell at ₦300/litre.
He said, “If we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure you that we should be able to buy PMS at N300/litre as the pump price.
However, Tunji Oyebanji, former Chairman MEMAN and CEO of 11 Plc, disagreed. Added that the price of petrol cannot drop as low as ₦700 per litre due to the high cost of crude oil, refining, transportation, finance, and distribution margins.
Oyebanji cited the example of diesel prices dropping from N1,700 to N1,200/litre after Dangote refinery started production, but attributed this to the exchange rate.
“We were selling diesel for N1,700 to N1,800/litre, but as soon as Dangote refinery started production he brought down the price to N1,200/litre.”
“If the exchange rate drops, diesel will drop below the N1,000/litre price. Now the exchange rate concern is because Dangote imports crude. If he is not importing, the exchange rate may not have so much effect, though he is still buying crude in dollars (in Nigeria) anyway.”
