Pricing Crude at ₦1/$ for Domestic Refining, a Declaration of Prosperity
By Patrick Oludare Every time a Nigerian motorist winces at the fuel pump, every time a market woman raises the price of tomatoes because transport costs have doubled, and every
Nigeria sells crude oil in dollars on the international market, while also purchasing refined products at international prices. This creates a paradox, as the country experiences high fuel costs and transportation expenses. The solution is to price crude oil allocated to domestic refineries at a special rate of ₦1 to $1. This does not change Nigeria's general exchange rate, but only affects the domestic value chain.
By applying this ₦1/$ mechanism inside the crude-to-products value chain, the final retail prices for various energy products would drop significantly. For example, diesel, currently priced at around ₦1,900 per litre, would become approximately ₦1.40 per litre, while petrol would cost around ₦1.10 per litre. This would reduce the cost of production for various industries, leading to lower prices for goods and services, higher purchasing power for consumers, and reduced food prices.
Critics argue that this would starve the country of vital foreign exchange earnings, but the mathematics shows that Nigeria produces more crude oil than it consumes domestically. Therefore, over 70% of Nigeria's daily crude oil production would still be exported at full international prices, ensuring sufficient foreign exchange earnings.
Written by urgent.news from This Day's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
