Experts Believe That The Dangote Refinery Will Put An End To The Fuel Scarcity Problem, Rather Than Alleviate High Fuel Prices.

Nigeria’s fuel scarcity, which has persisted for over two decades, may finally come to an end with the introduction of the Dangote Refinery’s Premium Motor Spirit (PMS). However, experts believe that the high prices of fuel will continue, at least in the short term.

The Nigerian Labour Congress (NLC) has rejected the recent increase in the pump price of petrol and protesters in Abuja are demanding the dismissal of Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation Limited (NNPC Ltd). The NNPC has admitted that its substantial debt to suppliers is hampering fuel supply and leading to the ongoing scarcity. Financial issues and the pressure on operations have been cited as the main reasons for the scarcity.

Human Rights lawyer, Femi Falana, has raised concerns about the rising cost of living and the arbitrary hike in petrol prices. He also called for a thorough investigation into the fraud in fuel importation in Nigeria.

The protesters in Abuja voiced their dissatisfaction with Kyari’s tenure and demanded accountability in the affairs of the NNPC Ltd. They questioned why a country as rich in oil as Nigeria continues to suffer from petrol scarcity.

The House of Representatives Ad Hoc Committee on the State of Refineries revealed that the Federal Government spent over N11 trillion on the rehabilitation of the three refineries from 2010 to 2023. Despite these investments, the refineries have been running at a loss with poor productivity.

Experts suggest that the government should consider selling the refineries as they have been poorly managed over the years. The private sector could potentially run them more efficiently and reduce the burden on taxpayers.

The continuous importation of refined petroleum products has put a strain on Nigeria’s struggling economy. Between 2015 and 2019, Nigeria spent $37.9 billion on importing petrol. This has contributed to the weakening of the Naira and the high demand for foreign exchange.

The Dangote Refinery, with its capacity to produce 650,000 barrels per day, is expected to address Nigeria’s dependence on fuel imports. It plans to increase its petrol production to 30 million litres per day by next month. While this will reduce the country’s petrol importation, experts believe that a drastic reduction in fuel prices is unlikely.

The Dangote Refinery’s production will have a positive impact on Nigeria’s balance of trade and reduce the country’s demand for foreign exchange. It is expected to eliminate fuel queues, increase energy security, and provide quality petrol that meets international standards.

Overall, the Dangote Refinery’s entry into the Nigerian market is seen as a step towards ending fuel scarcity, but the high prices of fuel are expected to persist in the short term. The government’s focus should shift towards implementing policies that promote efficient refinery management and reduce the burden on taxpayers.


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