The resuscitation of Port Harcourt refinery and the coming of the Dangote refinery may not bring about a drastic crash in fuel prices expected by Nigerians.
The expectation can only be realised until there is a reduction in crude oil prices at the international market and naira gains at the foreign exchange market, an expert has said.
Vice President of Crude Oil and Argus Media, James Gooder, spoke on “Market Trends Transparency and Fair Pricing” on petroleum products in Nigeria’s petroleum sector at the quarterly webinar and engagement with Energy Editors held by the Major Energies Marketers Association of Nigeria (MEMAN), yesterday, reports Daily Independent.
Forex, he said, remains a key factor to fuel price reduction in Nigeria, adding that reactivation of Port Harcourt Refinery to complement Dangote Refinery would guarantee supply in the domestic market and also serve the international market
According to him, the production from both refineries and other smaller ones across the country would slightly force the prices down, but it may not be a drastic reduction.
He added: “For prices to drop to about N700 or N800 and below, we need to see a substantial change in the foreign exchange and reduction in prices of crude at the international market
“The advantage of the production is that it will secure supply. We have Dangote and Port Harcourt Refinery now, while Warri and Kaduna are likely to come soon”
He maintained that products being exported from the Dangote refinery could bring more foreign exchange into Nigeria and then strengthen the exchange rate.
He explained that the refineries will not be restricted to domestic supply as they are also open to international supply in their quest to yield returns.
According to him, competition would aid the market, adding that there was a need for the regulatory institutions in the oil and gas industry to strengthen the rules and enforce them appropriately.
