ABUJA, Nigeria (VOICE OF NAIJA)-The National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has warned that the price of Premium Motor Spirit (petrol) could rise if crude oil prices continue to surge.
Osifo made this projection during PENGASSAN’s National Executive Council meeting held on Thursday in Lagos.
He emphasized the need for improved exchange rate management, cautioning that a rebound in crude oil prices could trigger significant increases in petrol costs.
“The crude price rose to $80 per barrel today. Without exchange rate improvements, PMS prices will increase in the coming weeks,” Osifo stated.
He attributed the high cost of fuel across the country to the collapse of the exchange rate, even as domestic refineries begin operations, albeit not at full capacity.
He addressed misconceptions about refining, clarifying that producing high-quality Premium Motor Spirit (PMS) requires multiple refining stages.
Osifo said, “The old Port Harcourt refinery is functional, and there is significant progress at the Kaduna and Port Harcourt refineries. Refineries globally engage in blending operations; it is a normal part of the process.”
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On the rising cost of PMS, he linked it to the fluctuating exchange rate, highlighting its impact on the Nigerian economy.
“The price of PMS is directly linked to our weak naira. If the exchange rate improves to below N1,000 to a dollar, PMS could sell for N500–N600 per litre,” he noted.
Drawing comparisons with countries like Venezuela and Zimbabwe, Osifo underscored the importance of currency management.
“The oil and gas business is conducted in USD (United States dollar), from equipment to expatriate salaries. Weak currency translates to higher costs, including PMS,” he added.
Osifo also debunked claims that local refining would drastically reduce fuel prices, explaining that cost margins must be factored in.
“Producing locally does not mean selling below cost. Even farmers calculate their production costs before adding margins,” he emphasised.
In a related development, Osifo criticised Nigeria’s 2025 budget of ₦49tn (approximately $30bn), describing it as grossly inadequate to address the country’s needs, especially given its population of over 230 million.
“The budget of $30bn is abysmally low for a country like Nigeria, especially when you compare it with nations like South Africa, which has a population of about 60 million but operates on a budget of over $120bn,” he stated.
He further stressed the need for Nigeria to leverage its abundant natural and mineral resources to expand its revenue base and reduce its reliance on loans.