The price of petrol at filling stations will not go down even if all five Nigerian refineries are working at full capacity and producing the most amount of the product.
This is according to the statements made by President Bola Tinubu's Special Adviser on Media and Publicity, Ajuri Ngelale while he was a guest on Television Continental's talk show, "Your View".
More refineries do not equate to cheap fuel.
During the television interview monitored by Reporters, Ngelale dismissed the idea that having more refineries will bring down the price of petrol as a myth that doesn't happen anywhere in the world
He said:
Even if we have the most refineries producing the most PMS in the world, you will find that the most prolific PMS producers with their refineries...if you go to see what they are charging in their pump, you will find that it's no different from those countries that don't have refineries.
The presidential spokesman said that the reason why the price of the pump will not go down irrespective of what your refining capacity is as a country is that nobody spends billions of dollars on building a refinery because of charity or because of corporate social responsibility, but to make money.
So that is why you find that no matter how many oil marketers you have bringing the product into the country, no matter how many refiners you have, producing massive amounts of PMS, the price is dependent on the international benchmark of what the cost of crude oil per barrel is.
When the oil price is high, the price in the pump will go up, when the oil price is p is low, the price will go down. These are market fundamentals that are determined, not in one country, but on the international stage.
Ngelale says there are benefits of having refineries.
Ngelale however stated that having working refineries have big benefits for the country hence the renovation of the Port Harcourt refinery which according to President Tinubu is coming on stream in December 2023.
He also noted the Dangote refinery which has already been launched and will be dishing out products soon and the 200,000 barrel-per-day BUA refinery in Akwa Ibom State.
So, what we are saying is the benefit of having refining in the country is not that you will have cheap fuel. The benefit is that you would have saved the country hundreds of millions of dollars in transportation and logistics costs that we are spending on an annual basis of having to put refined PMS from the international refinery on the water to come to Nigerian shores where we would now offload and send to our distribution stations. You save that money.
He added that Nigeria spends 10 billion a year on foreign exchange paying out to refineries and partners to get the product exchanged from crude to refined PMS. He said all that money would be saved in the central bank as a result of having working local refineries.
He added:
There are benefits, big benefits, but one of them is not the issue of having cheap fuel.
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