Tinubu’s Fuel Pricing Policy Is Insanity, Petrol Can Sell For N605/Litre In Nigeria, Says Olawepo-Hashim
Tinubu’s Fuel Pricing Policy Is Insanity, Petrol Can Sell For N605/Litre In Nigeria, Says Olawepo-Hashim
According to Olawepo-Hashim, petrol could sell for about N605 per litre if the cost of locally produced crude oil and other associated expenses were properly calculated.
As Nigeria’s economic woes continue to deepen following President Bola Tinubu’s removal of the petrol subsidy and decision to allow fuel pump prices to be determined by market forces, an Accord Party presidential aspirant, Gbenga Olawepo-Hashim, has described the policy as “insanity.”
The presidential aspirant made the remarks while appearing on Channels TV, where he challenged the Federal Government’s justification for the continued high price of petrol, arguing that the fuel subsidy debate was largely a product of the government’s accounting and crude-pricing system.
“It is insanity and idiocy for anybody, especially for the president of an oil-producing country, to say that both domestic and international oil prices you leave to market forces. What President Tinubu did was insanity,” Olawepo-Hashim said.
According to Olawepo-Hashim, petrol could sell for about N605 per litre if the cost of locally produced crude oil and other associated expenses were properly calculated.
“The truth of it is that the price is currently inflated. By who? By the government,” he said.
Olawepo-Hashim said data from the Nigerian National Petroleum Company Limited (NNPCL) showed that the cost of producing a barrel of crude oil in Nigeria was about $30.
He said adding a $15 margin to the production cost, approximately $5 for refining and another $7 for transportation and insurance would put the total cost at about $57 per barrel.
Based on his calculation, he said the figure should translate to a petrol price of about 34 cents per litre, which he estimated at roughly N501 per litre using an exchange rate of N1,400 to the dollar.
He proposed N605 per litre as a possible pump price, saying an additional N100 energy tax could be included to fund the development of alternative energy sources.
The Accord chieftain also rejected the description of Nigeria’s previous petrol pricing arrangement as a conventional subsidy.
“What you have had really has never been any subsidy, even when we had lower pump petrol prices. The subsidy issue is more of an accounting magic,” he said.
He argued that crude oil supplied to domestic refineries should not automatically be priced at the same international benchmark used for crude sold abroad.
According to him, while the international price represents the opportunity cost of crude oil, it should not necessarily determine the price of crude consumed within Nigeria.
“You cannot price your local products at international price,” Olawepo-Hashim said.
He cited oil-producing countries such as Saudi Arabia and Kuwait as examples of nations that, according to him, do not apply international crude prices to their domestic markets in the same manner as Nigeria.
Olawepo-Hashim also called for greater transparency in the determination of Nigeria’s crude production costs, questioning why locally produced crude was being priced at its current level.
He alleged that the system could be susceptible to “a lot of over-invoicing” and challenged the government and other stakeholders to make the underlying figures available for public scrutiny.
“If anyone has a different idea, they should bring their books. Let’s see what it is, how much it costs to produce a barrel of crude in Nigeria,” he said.
The former presidential aspirant maintained that the current petrol pricing structure was placing an unnecessary burden on Nigerians and argued that the government should review its approach to domestic crude pricing rather than relying solely on market forces.
His comments come amid continued public debate over the impact of the petrol subsidy removal on inflation, transportation costs, food prices and household incomes, with Nigerians facing significantly higher living costs since the policy was announced in May 2023.
