The National Institute for Policy and Strategic Studies (NIPSS) has reassured Nigerians that the price of Premium Motor Spirit (PMS), commonly known as petrol, will decrease as local refineries, including the Dangote Refinery, begin operations. This comes as a relief to many Nigerians who have been struggling with the surge in fuel prices, which rose sharply following the removal of the fuel subsidy.
Before the removal of the subsidy, petrol prices were below ₦200 per litre. However, since the subsidy was removed, prices have skyrocketed to around ₦930 per litre, depending on the location. This sharp increase has caused widespread concern, particularly for the average Nigerian who depends on petrol for daily transportation and business activities.
However, NIPSS Director-General, Ayo Omotayo, expressed optimism during his appearance on Channels Television’s The Morning Brief on Tuesday. Omotayo explained that while the short-term effects of the subsidy removal have been tough for many Nigerians, there is hope that fuel prices will begin to fall as more local refineries come online. He pointed specifically to the upcoming Dangote Refinery, as well as the improvements in other refineries, including the Port Harcourt Refinery, which he noted has been operating for 110 continuous days.
Omotayo highlighted the significance of local refineries in stabilising the price of petrol. He explained that the continued operation of the Port Harcourt Refinery and the anticipated start-up of the Dangote Refinery are crucial factors that will help reduce Nigeria’s dependence on imported fuel, ultimately lowering fuel prices for Nigerians.
“With the removal of the first subsidy, we have Dangote Refinery coming on board. We also have other refineries coming into operation, such as the Port Harcourt Refinery, which has worked continuously for 110 days, if I’ve counted right,” Omotayo said. He added that these developments represent “short-term gains” that Nigerians will begin to feel soon.
According to Omotayo, Nigerians can expect petrol prices to decrease significantly, predicting a price of around ₦750 per litre before the end of the year. He also suggested that the country’s exchange rate, which has been volatile, would stabilise in the near future, contributing to a more manageable economic environment.
“We’re looking at petrol prices coming down as low as ₦750 per litre before the end of the year,” Omotayo stated. He also mentioned that the exchange rate is expected to stabilise to about 1.3, which would be beneficial for the economy. “It is going to continue like that as more of our refineries come into place. We will become a net exporter in the long run,” he said, emphasising that Nigeria’s energy sector will improve as local production capacity grows.
Despite his optimism, Omotayo did not shy away from acknowledging the hardships that Nigerians are facing as a result of the fuel price hike. He recognised that the country is in a difficult position, especially in light of the subsidy removal, which has had an immediate impact on the cost of living. The rising price of petrol has affected transportation costs, food prices, and the general cost of living for many Nigerians.
“The gains at this time are very little,” Omotayo admitted, but he urged Nigerians to remain hopeful. He reassured the public that while the short-term impact might be painful, the country will eventually benefit from the policy changes.
“The gains will be seen in the medium and long term,” Omotayo stated. “For now, the government has introduced palliatives to help ease the burden on the poor. We all need to adjust our spending.” He explained that the government is working on strategies to provide relief to the most vulnerable Nigerians, ensuring that they are supported through the difficult transition period.
Omotayo’s comments align with the government’s broader economic strategy, which includes palliative measures to alleviate the immediate burden on citizens. The federal government has been rolling out various initiatives, such as cash transfers and food distribution programs, aimed at providing some relief to the poor and mitigating the effects of the subsidy removal.
Omotayo stressed that although the short-term benefits may not be immediately visible, the long-term advantages of the subsidy removal will far outweigh the initial difficulties. He pointed to the gradual development of Nigeria’s oil refining capacity, the stabilisation of the exchange rate, and the eventual reduction in fuel prices as key outcomes that will contribute to a more prosperous and self-sufficient Nigeria in the future.
He explained that with more refineries in operation, Nigeria will reduce its reliance on imported refined petroleum products, which currently drive up fuel prices. The Dangote Refinery, one of the largest private refineries in Africa, is expected to play a pivotal role in transforming the country’s refining capacity and boosting local production. Once operational, the refinery will process large volumes of crude oil and significantly reduce the need for imports.
Additionally, Omotayo mentioned that as more refineries come online, Nigeria will become a net exporter of refined products. This shift will not only help lower domestic fuel prices but will also improve the country’s foreign exchange earnings and create jobs within the oil and gas sector.
While Omotayo’s reassurances have provided some hope, many Nigerians remain sceptical about the timeline for the expected price reductions. The surge in petrol prices has placed a significant strain on households, with many people struggling to afford basic goods and services. For most Nigerians, the hike in fuel prices has led to an increase in the cost of transportation, food, and other essential items.
On social media, Nigerians have expressed frustration with the government’s handling of the fuel price situation. Many have criticised the rising cost of living and the impact that the fuel price hike is having on their daily lives. Some have called for immediate action to address the issue, while others have urged the government to ensure that the promised benefits of the subsidy removal are realised sooner rather than later.
Despite these concerns, Omotayo’s message provides a glimmer of hope for Nigerians, suggesting that relief may be on the way as local refineries begin to operate and the country moves towards greater energy self-sufficiency.
