The Federal Government have been increase crude oil supply to local refineries and consider targeted subsidies to cushion the impact of rising fuel prices on Nigerians following the global oil market disruption caused by the ongoing conflict involving Iran.
A civil society group, Partners for National Economic Progress (PANEP) made the appeal on Wednesday in Abuja during a press conference, warning that the escalating tensions in the Middle East and the disruption of oil supply routes could further worsen fuel prices in Nigeria.
Convener of PANEP, Comrade Danesi Momoh Princ, alongside Igwe Ude-Umanta, Olamide Odumosu, Olayinka Olayinka and Dada Daniel Omaga, said the strike on Iran by the United States and Israel had already triggered sharp increases in global oil prices.
According to the group, over half of global oil supply comes from Iran and other Gulf countries, and the conflict has significantly disrupted production and supply, pushing crude prices upward.
“In the 10 days of the war, local petroleum product prices have risen to neck-breaking levels, with low-income earners and the poor masses facing daily survival concerns,” the group said.
It noted that the price of Premium Motor Spirit (PMS) had risen from an average of between N830–N870 per litre to about N1,300–N1,400, while Automotive Gas Oil (AGO), commonly known as diesel, had increased from about N1,200 to N1,700 per litre.
PANEP warned that the development has already triggered inflation in transportation costs and the prices of goods and services across the country.
While acknowledging that a return to full fuel subsidy may not be feasible, the group said the Federal Government could still mitigate the impact by increasing crude supply to domestic refineries at subsidised rates.
“Therefore, the Federal Government, through the Nigerian National Petroleum Company Limited (NNPC), should prioritise and increase crude supply to local refineries and subsidise it in a way that will reflect in reduced pump prices,” the group stated.
PANEP also referenced comments from Dangote Refinery indicating that despite its capacity to guarantee national fuel supply during the crisis, it has been receiving less than its required volume of local crude.
The group said the refinery currently receives an average of 28 per cent of its local crude allocation, far below the expected levels needed for optimal production.
“Nigeria, as an oil-producing country, should not be totally exposed to global oil price volatility. Although there are currently no fuel shortages or queues, prices will remain high if local refineries continue sourcing crude from the global market instead of adequate domestic supply,” PANEP said.
The group commended the Dangote Refinery for maintaining supply stability amid the global crisis and dismissed criticism blaming the refinery for the rising fuel prices.
“It is because of Dangote Refinery that Nigeria has adequate supply and is not paying higher than prevailing international prices,” it said.
PANEP warned that if the conflict persists, petrol prices in Nigeria could rise to N2,000 per litre, a situation it described as capable of triggering a national economic crisis.
“The Federal Government should not wait until the situation deteriorates before taking action.
The time to act is now. Local refineries must be adequately supplied with crude at subsidised rates so that pump prices can be reduced and the hardship on Nigerians eased,” the group added.
It pledged to continue engaging stakeholders to promote national economic stability while standing with Nigerians should the hardship worsen.
SOURCE: Guardian Nigeria
