The Federal Government
We write with concern, acknowledging the severe hardships that have descended upon our nation due to the recent, sharp increase in the prices of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), commonly known as petrol and diesel. What was already a difficult economic situation has been pushed to a breaking point, threatening the very fabric of our daily lives.
The numbers tell a stark story, in just the last week, petrol prices have skyrocketed from an average of N830–N870 per litre to as high as N1,400 per litre in some filling stations. Diesel, the lifeblood of our industries and transportation, has seen a similar surge, jumping from about N1,200 to as high as N1,750 per litre. Experts warn that if the current global crisis persists, petrol could approach N2,000 per litre .
These are not just abstract numbers. They translate into a daily reality of survival for millions of Nigerians. For the average Nigerian, this means:
1. Soaring Transportation Costs: Commuting to work, taking children to school, or moving goods to the market all these will become luxury as many can no longer afford them
2. Exploding Food Prices: Our food supply chain relies entirely on diesel-powered trucks. As diesel costs rise, the price of food staples follows immediately, worsening the nation's food insecurity.
3. Crippled Small Businesses: From welders, vulcanizers, Pepper grinders and tailors to cold drink sellers and restaurant owners, millions of small enterprises depend on generators to function due to our national power challenges. The rising cost of fuel forces many to either shut down or pass on the exorbitant costs to their customers .
4. Rekindled Inflation Nightmare: This fuel price shock threatens to reverse the hard-won gains made in taming inflation over the past year, plunging the country back into a prolonged cost-of-living crisis .
It is crucial for all to understand that the primary driver of this current hardship is not a domestic failure, but a major global event. The escalating geopolitical tensions and conflict in the Middle East have led to the closure of the Strait of Hormuz, a critical waterway through which about a sixty percent of the world's oil passes . This has sent global crude prices soaring past $95 per barrel.
As energy expert David Okon explained, The refinery is already absorbing part of the cost to cushion the impact of the crisis on Nigerians, when the refinery previously sold petrol at N774 per litre, crude oil was landing at about $68 per barrel. However, with crude now arriving at roughly $95 per barrel, the cost difference is significant . The Dangote refinery, operating as a private business in a deregulated market, must procure this expensive crude, making price adjustments an inevitable market reality
While the global situation is beyond our control, the Federal Government has the power to implement measures that can shield its citizens from the full force of this storm. We respectfully appeal to the government to consider the following relief measures:
1. Fix Government-Owned Refineries Through Strategic Partnerships.
For decades, our state-owned refineries have been a national shame, consuming billions of Naira in turnaround maintenance without delivering results. The current administration has rightly identified that the problem has always been operational, not just financial. We urge the government to expedite its new strategy of bringing in experienced global refinery operators as equity partners . As NNPC GCEO Bayo Ojulari stated, When operators have equity, they care about uptime, efficiency, and margins. This is the only way to ensure these assets run as sustainable businesses rather than perennial projects.
2. Deepen Collaboration with and Support for the Dangote Refinery
We commend the government's existing 7.25% equity stake in the Dangote refinery, which rightly embeds national interest in its success. However, we must now move beyond passive ownership to active collaboration.
3· Prioritize Domestic Crude Supply: We call on the government, through NNPC Ltd., to immediately increase the allocation of local crude to the Dangote refinery at subsidized rates. Currently, the refinery receives less than required volumes, forcing it to import crude at international prices. As a civil society group, PANEP, noted, Nigeria, as an oil-producing country, should not be totally exposed to global oil price volatility. Guaranteeing local crude supply will directly lower production costs, which should reflect in lower pump prices.
4. Acknowledge the Stabilizing Role: The Dangote refinery has been a bulwark against a total national collapse. Without it, we would be facing not just high prices, but severe fuel shortages, endless queues, and a resurgence of the black market. Its commitment to prioritizing the domestic market is a strategic national asset that must be protected and empowered.
In conclusion, the hardship is real and needs urgent attention. While the government cannot control the war in the Middle East, it can control how Nigeria responds. By fixing our own refineries and fully empowering the Dangote refinery with local crude, we can build a resilient energy sector that protects Nigerians from the worst of global shocks. The time for decisive action is now.
Sincerely,
E-Signed:
Ogbonnaya C Emmanuel
National President,
Youth Advancement Initiative
08035809568
Olawale Atelumotu
National General Secretary
Youth Advancement Initiative
08063737464
Daniel Yusuf
National PRO
Youth Advancement Initiative
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