Former IPMAN chairman predicts shocking future price of petrol in Nigeria

• A former chairman of the Independent Petroleum Marketers Association (IPMAN) has stated that petrol prices will drop to N600 per litre
• Joseph Obele said that this will only happen when the federal government fully begins its crude-for-naira initiative
• The program will see the NNPC sell crude oil and other refined petroleum products to local refineries in naira

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

Premium motor spirit, better known as petrol is expected to sell below N600 at the commencement of the federal government's crude-for-naira initiative.

This assertion was made by Dr. Joseph Obele, the former executive chairman of the Independent Petroleum Marketers Association (IPMAN) in Rivers State who was on a television interview with News Central TV.

Obele insists that some components which make up the pricing of petrol will be eased by the crude-for-naira initiative. Photo credit - CBN, StateHouse, Oil Market
Source: UGC

It would be recalled that a few months ago, the Federal Executive Council led by President Bola Tinubu approved the sale of crude oil to local refineries in naira and the purchase of petroleum products in naira.

The ministry of finance hinted that the sale of crude oil and refined petroleum products in naira officially commenced on October 1, 2024.

Petrol price could drop

Giving his position on the crude-for-naira initiative, Obele insists that the some components which make up the pricing of petrol will be eased by the initiative.

Obele said:

"The selling rate of PMS right now is a combination of seven components. So going by this Naira-for-crude agreement signed by between NNPC and Dangote Plc, I am saying four amongst the seven components will be eliminated. And any cost element that has been eliminated, further cause a reduction to the unit price of any commodity. From my analysis, PMS will be selling below N600 when this naira-for crude oil (policy) commences."

Political and African Affairs analyst, Lanre Toluhi disagreed with Obele about the possible reduction in petrol pump price unless by government subsidy.

Toluhi said:

"There's a global benchmarking on it (crude oil), what the refineries will do would reduce the reliance on importation of fuel. And yes, there might be a little bit coming down of price if there's enough competition. But because of the monopolistic approach and advantage that Dangote might be having, he would want to benchmark his price with the international market, and it might not really be what we think would happen. The only way to achieve lower cost of this end product is if we have the other four refineries working."

In September, the government explained that the naira-for-crude initiative would help ease pressure on the naira, reduce unnecessary transaction costs, and improve the nationwide supply of petroleum products.

However, to the disappointment of many Nigerians, the NNPC recently hiked petrol prices at its filling stations for the second time in less than two months.

NPA to coordinate crude-for naira initiative

In related news, Legit.ng earlier reported that the FG had directed the Nigerian Ports Authority to coordinate the plan to sell crude oil and petroleum products to the Dangote Refinery in naira.

As per the FG directive, a One-Stop Shop located at the NPA will coordinate service provision from all regulatory and security agencies and other stakeholders to ensure a smooth implementation of this initiative.

The team will collaborate and provide the efficiencies necessary to ensure the availability of petrol and other petroleum products.

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Source: Legit.ng