The Federal Government has said it is imperative to reduce the cost of petroleum products in the country as a reflection of declining global crude oil prices. The Minister of Finance, Wale Edun, who gave the advice during an interview aired on Wednesday’s edition of Channels Television’s Politics Today and monitored by New Telegraph, also stated that the current prices of refined petroleum products reflected market realities given the ongoing Middle East crisis.
He added that Nigerians should be thankful that the country can refine petroleum products. The minister further explained that the crude supplied under the Nairafor-Crude arrangement was priced according to the global benchmark price plus a premium which is then converted to naira using the prevailing market exchange rate.
Edun said: “As responsible corporate citizens operating in a high-governance code and ethical environment, we believe it is imperative to reduce the price of our products as a reflection of the decline in global crude oil prices. “All our crude are priced on the global benchmark price plus a $3 to $6 additional premium.
Our foreign exchange ( forex) is paid at the prevailing market rate of the day, with no subsidy in both crude or forex. “For the avoidance of doubt, the crude supplied under the Naira-for-Crude arrangement is priced according to the global benchmark price plus a premium which is then converted to naira using the prevailing market exchange rate.”
He added: “The market price for petroleum products is what has been instilled by Mr. President—a mechanism that was missing for so long. It is important to understand that this is not a one-way street. “We have seen Dangote [Refinery] reduce prices from around N1,200 to just over N1,000 or N1,050; those are the natural dynamics of the market.
“The resilience that the Nigerian economy has is coming largely from the fact that we do have that investment by the private sector, by Alhaji Aliko Dangote, in refining, and we need to support our refiners just as others are supporting them to keep petroleum products flowing. “I think we should be thankful at this time for the capacity we have in Nigeria to refine crude into petrochemicals and petroleum products.”
The minister stated that despite the global shock occasioned by the Middle East crisis and other international vagaries or fluctuations, Nigeria’s economy was well on course. Edun said: “That resilience is what we are trying to build in the economy, and that is what we have built so far. Of all the things that have happened till date, Ukraine has continued beyond what people expected, and of course, we have this new flare-up in the Middle East.”
