The Federal Government has assured Nigerians that petrol prices could decline significantly, dropping to about ₦750 per litre by the end of 2025. This optimism follows the operational commencement of Dangote Refinery and other local refineries.
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Fuel Prices Expected to Drop as Refineries Become Fully Operational
Speaking on The Morning Brief on Channels Television, the Director-General of the National Institute for Policy and Strategic Studies (NIPSS), Ayo Omotayo, projected that fuel prices would reduce once local refineries begin full production.
“With the removal of the fuel subsidy, we now have Dangote Refinery coming on board. The Port Harcourt refinery has been operational for over 110 days. These are short-term gains, but more benefits will come as other refineries start production,” Omotayo stated.
He further highlighted that an improved exchange rate would also contribute to the projected price drop.
How Foreign Exchange Will Influence Fuel Prices
According to Omotayo, foreign exchange rates play a crucial role in fuel pricing. He projected that the naira would stabilize further, leading to more affordable fuel prices for Nigerians.
“We expect the exchange rate to drop to about ₦1,300 per dollar by the end of the year. As our refineries become fully functional, Nigeria will shift towards becoming a net exporter of refined petroleum products,” he added.
Government’s Stance on Subsidy Removal and Economic Recovery
While acknowledging the current economic challenges, Omotayo insisted that the long-term benefits of subsidy removal outweigh the temporary hardships.
“The benefits may seem minimal now, but over time, we will recover and experience economic stability. The government has introduced various palliatives to ease the burden on Nigerians, and we all need to adjust our spending accordingly,” he said.
What This Means for Nigerians
- Lower Petrol Prices: A drop in petrol prices to ₦750 per litre will reduce transportation and logistics costs.
- Improved Economy: Increased refinery production will boost Nigeria’s economic standing and reduce dependency on fuel imports.
- Stronger Naira: A stabilized exchange rate will support long-term fuel price reductions and economic growth.
FAQs
1. Will petrol prices truly drop to ₦750 per litre?
The government is optimistic that with local refineries becoming operational and a more stable naira, petrol prices will decrease by the end of 2025.
2. How will Dangote Refinery impact fuel prices?
The refinery is expected to produce enough petrol to reduce Nigeria’s reliance on imports, leading to lower prices.
3. What role does the exchange rate play in fuel pricing?
A stronger naira reduces the cost of importing petroleum products, which translates to lower fuel prices.
4. What is the government doing to ease the current fuel burden?
The government has introduced palliatives and economic policies aimed at cushioning the impact of subsidy removal.
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