Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has said that prices of petroleum products would remain high despite the commencement of production by the Dangote and Port Harcourt Refineries.
Festus Osifo, president of PENGASSAN, said that the high exchange rate, currently over N1,600 per dollar, plays a key role in petroleum product prices. This has continued to impact commodity prices in Nigeria.
According to the PENGASSAN chief, these refineries will create jobs but will not significantly lower the prices of petroleum products, saying that the naira’s weakness is to blame.
He said that the cost of goods will remain high with the naira exchanged at N1,700 per dollar. He stated that when the local currency was exchanged for N316 per dollar, diesel sold for about N215 per litre, and the price of kerosene was also low.
He said that urgent issues are challenging the Nigerian currency.
He stated that Nigeria still faces a high proportion of food crises, which impact the lives of Nigerians and threaten society.
The PENGASSAN boss noted that at least 33.1 million Nigerians in 26 states and the FCT will face food and nutrition crises between June and August 2025, saying that the consequences are bleak, asking the government to act swiftly.
Osifo echoed Tonye Cole, co-founder of Sahara Group, an energy conglomerate, who said that petrol prices will not drop to N700 per litre.
He cited several reasons, including volatile foreign exchange rates as key factors.
Cole, who spoke on Channels Television on Tuesday, November 26, 2024, highlighted pricing complexities after announcing that the Port Harcourt Refinery has commenced production.
The refinery operates at 60% capacity and will refine 60,000 barrels of crude oil daily.
It is also expected to complement production at the Warri Refinery.
The billionaire noted that while restarting local refining is essential, imported machinery and FX costs continue to affect pricing.
According to him, the price sold in Nigeria is lower than the landing cost, which makes marketers unwilling to import.
“So, Nigerians are already benefiting from that. Secondly, the volume of consumption in Nigeria has dropped, and as a result of that, the pressure you used to have on foreign exchange has gone down because we’re no longer importing that much.
In last year’s election, the Rivers State APC guber candidate cited the naira-for-crude sale arrangement by the Nigerian government and local refineries, saying that PMS would not sell below N700 per litre.
He also stated that the machinery used in refurbishing the Port Harcourt Refinery was imported, saying that factors operators will factor in FX for the imports.
He lauded the progress in achieving local petroleum product refining and said that Nigeria must resolve some issues to stabilise petrol prices.
TimesNow.com.ng earlier reported that the Port Harcourt Refinery disclosed that it did not halt operations completely but scaled down to speed up facility repairs.
