Dangote Refinery And The Rising Petrol Prices: What’s Really Going On?

What’s Behind the Surge in Petrol Prices?

Naija News is bringing you the latest updates on the rising cost of petrol in Nigeria. If you’ve noticed the price at the pump creeping up, you’re not alone. Recent reports show that petrol prices have jumped from ₦860 to ₦880 per litre to as high as ₦930 to ₦960 per litre at MRS filling stations and other Dangote Refinery partners. That’s a significant increase, and it’s raising eyebrows across the nation.

But here’s the kicker: Billy Gillis-Harry, the national president of the Petroleum Retailers Outlets Owners Association of Nigeria (PETROAN), is sounding the alarm. According to him, we might not have seen the worst of it yet. Prices could soar to ₦1,000 per litre and beyond. That’s right—up to a thousand naira for a single litre of petrol. So, what’s driving this potential price hike? It all comes down to the ongoing negotiations between Dangote Refinery and the Nigerian Government, represented by the Nigerian National Petroleum Company Limited (NNPCL). Specifically, they’re discussing the future of the Naira-for-crude deal.

Who’s to Blame for the Price Spike?

When the Daily Post sat down with Gillis-Harry for an interview, they asked a question on everyone’s mind: Who should be held accountable for the rising prices? Gillis-Harry’s response was clear and thoughtful. “Why are people so quick to blame Dangote Refinery or the federal government?” he asked. “Has anyone actually confirmed that the government has stopped the Naira-for-crude deal? Until we have solid evidence, it’s premature to point fingers.”

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Gillis-Harry went on to explain that the situation is more complex than it seems. “You can’t just blame one party,” he emphasized. “This is about the deregulation of the downstream sector. It’s about economic and environmental factors that influence pricing. Let’s not rush to conclusions without all the facts.”

He also revealed that PETROAN has been in direct communication with the Honorable Minister of Petroleum. During these discussions, they learned that the government is reviewing the Naira-for-crude deal, which has been in place for the past 180 days. “The way forward isn’t about stopping the deal,” Gillis-Harry explained. “It’s about ensuring it continues in a way that benefits everyone. Until a final decision is made, it’s unfair to claim the deal is dead.”

Private Enterprise and Market Pricing

Gillis-Harry also touched on the autonomy of Dangote Refinery. As a private enterprise operating within a free trade zone, the refinery has the freedom to make decisions that align with market dynamics. “In our view,” he said, “these decisions should reflect market pricing. After all, Dangote Refinery is the largest refinery in Africa. Nigerians take immense pride in this achievement, and I, personally, feel honored to be associated with it.”

But there’s more to consider. Gillis-Harry pointed out that many PETROAN members have been buying crude in dollars, even while the Naira-for-crude deal has been ongoing. “This isn’t a new phenomenon,” he noted. “It’s been happening for months. Economic and environmental factors play a huge role in determining prices. If these factors change, it’s only natural that prices will fluctuate.”

The Bigger Picture: Economic and Environmental Factors

When asked if Dangote Refinery could be contributing to the price hikes, Gillis-Harry was candid. “Of course, they are,” he admitted. “But it’s not just about the refinery. Many dealers are anticipating a shift toward dollar-based transactions. If other refineries start selling their products in dollars, we risk dollarizing the Nigerian economy. That would be a major setback for us because it would undermine the value of the naira.”

He concluded by urging everyone to focus on the root causes of the price spike. “Let’s not point fingers without understanding the broader context,” he said. “The changes we’re seeing are driven by economic and environmental factors. Until we address these underlying issues, we won’t find a lasting solution.”

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So, there you have it. The rising petrol prices are a complex issue with no simple answers. As negotiations continue, one thing is clear: Nigerians need transparency and a commitment to finding solutions that work for everyone.