The National Institute for Policy and Strategic Studies (NIPSS) has assured Nigerians that the price of Premium Motor Spirit (PMS), commonly known as petrol, is set to decrease as the Dangote Refinery and other local refineries commence full operations.
Prior to the removal of the fuel subsidy, petrol was sold for less than ₦200 per litre. However, following the policy change, prices have surged to approximately ₦930 per litre, varying by location.
Despite the current high costs, NIPSS Director-General Ayo Omotayo expressed optimism about an impending price reduction during an interview on Channels Television’s The Morning Brief on Tuesday.
Omotayo explained that as more refineries become operational, the price of fuel will naturally decline.
“With the removal of the subsidy, we now have the Dangote Refinery coming on board, along with other refineries. The Port Harcourt Refinery, for example, has been in operation continuously for 110 days. These are positive short-term developments,” he stated.
He projected that petrol prices could drop to around ₦750 per litre before the end of the year, with further improvements expected as the naira stabilizes against foreign currencies.
“We anticipate that prices will come down to as low as ₦750 before the year ends. Additionally, we expect the exchange rate to improve, potentially reaching around 1.3, and this trend will continue as more refineries come online. Ultimately, Nigeria will become a net exporter of refined petroleum products,” Omotayo added.
Acknowledging the current economic hardships, he emphasized that the long-term benefits of the subsidy removal would outweigh the present difficulties.
“The immediate gains may seem minimal, but in the long run, the country will recover from the sacrifices made today,” he assured.
Defending the decision to remove the subsidy, Omotayo stressed that while the impact is challenging now, the policy will yield significant benefits in the future. He highlighted that the government has introduced palliatives to alleviate the burden on the most vulnerable and urged Nigerians to adjust their spending habits accordingly.
“Most of the benefits will be realized in the medium and long term. For now, government interventions are in place to support those most affected,” he concluded.
