Certain Oil and Gas experts have indicated that the activation of the Port Harcourt and Dangote refineries could result in a slight decrease in petroleum product costs rather than a substantial price drop. These experts shared their views during an interview with the News Agency of Nigeria in Abuja.
They mentioned that certain additional expenses such as freight and port charges would likely be removed, contributing to this slight reduction in costs. The Federal Government recently announced the mechanical completion and flare start-up of the Port Harcourt Refining Company Limited (PHRC), with the second phase set to commence in 2024.
Senator Heineken Lokpobiri, the Minister of State Petroleum (Oil), highlighted that this milestone would mark the beginning of petroleum product production post-Christmas. The PHRC consists of two refining units, with the older plant capable of refining 60,000 barrels per day (bpd) and the new plant at 150,000 bpd, totaling 210,000 bpd.
Responding to this development, Olanrewaju Aladeitan, an Associate Professor of Energy and Natural Resources at the University of Abuja, suggested there might be a slight reduction in petrol prices due to the elimination of certain ancillary costs. However, he clarified that the prices of petroleum products may not significantly drop to warrant the term “crash.”
“The price may not come down significantly considering the fact that crude oil and condensates supply for the domestic market under the Petroleum Industry Act is going to be based on a willing supplier and a willing buyer basis.
“And the fact that the supply of crude oil will be commercially negotiated having regard to prevailing international market price for similar grades of crude,” he said.
“Hence international market price which of course is denominated in dollars will still be the determinant of cost of the crude oil that would be refined.
“So I do not see how the price of Petroleum products will crash,” Aladeitan said.
Additionally, Mr. Yushau Aliyu, an economic expert, expressed that achieving a mechanical test of the refinery after prolonged and fruitless attempts signifies addressing a portion of our shortage in refined Premium Motor Spirit (PMS).
Aliyu interpreted this achievement as a positive indicator of progress in resolving the forex deficit that has been a dominant factor in the ongoing liquidity crisis.
“In addition, the new Nigerian National Petroleum Company Limited (NNPC Ltd.) is responding to the immediate solution for availability of PMS in the economy.
“We are expecting the NNPC Ltd.’s retail stations to reduce their pump price due to absence of landing cost in the short term effects,” he said.
……….
Note : To submit Press Releases, Statements, and Advert Inquiries for publication on Waffi blog (website) or Television 📺, please use the following contact details: You can send an email to info@waffitv.com or reach us via Whatsapp at 07068286500
