Mkpoikana Udoma
Port Harcourt — As major petroleum products marketers begin lifting AGO from Dangote refinery, a Stakeholder and Downstream Expert, Dr Joseph Obele, says the pegging of diesel price at N1,225 per litre by Dangote was an exploitation of vulnerable Nigerians.
Obele who is a lecturer at the Department of Marketing, Ignatius Ajuru University of Education in Rivers State, said diesel importers hitherto imported and sold the product at less than N900 per litre, before the scarcity of Dollars and the surge in exchange rate pushed the product to above N1000 per litre.
The former IPMAN Chairman explained that considering the principles of comparative advantage, it was practically impossible for imported goods to be expensive as locally produced goods.
According to him, if imported diesel was selling below N900 per litre few months ago before the scarcity of dollars, same commodity produced within Nigeria should sell less than N700 per litre.
He maintained that the Port Harcourt refinery must be urgently privatized for efficiency, in order to bring down the nation’s inflation index, since all manufacturers and businesses in the country rely on diesel for production.
“As we celebrate the commencement of loading and distribution of refined petroleum products at Dangote refinery, it is important to point out that the initial selling rate of diesel above N1,200 is a clear indication that the Dangote refinery is basically established for profiteering and exploiting vulnerable Nigerians.
“This has further exonerated the stakeholders that stated earlier that the refinery is not a source of hope for Nigerians.
“Few months ago, importers of diesel were importing and selling it less than N900 in Nigeria. Diesel was selling in Nigeria below N900 before the scarcity (increment) of dollars. Unfortunately, the price of diesel experienced upward review above N1,000 because of the increment in exchange rate.
“Common sense should tell us that, if imported Diesel was selling below N900 few months ago before the scarcity of dollars, same commodity produced within Nigeria should sell less than N700 per litre. The new refinery can’t attain return on investment with the first set of shipped out cargoes, hence the price shouldn’t be exploitative, but considerate due to the bitting hardship in the country.
“Diesel is the most valuable commodity needed by manufacturers, corporate organisations, engineering firms, hospitality industry and construction companies in Nigeria. The demand for diesel is massive because it constitutes the major component of cost of production or cost of operating business in Nigeria.
“Several operators of the hospitality industry and manufacturing sector in Nigeria are shutting down because of High cost of diesel. The worrisome inflation index of Nigeria is mostly because of the high cost of diesel and not increment in price of fuel.”
Obele further explained that it was strategically beneficial to the citizens if the price of diesel was low, while the price of fuel remains high.
“Although the effect of high price of fuel is translated to cost of transportation, but any increment on the rate of of diesel is translated to the cost of every commodity in the market, because diesel is the most common component among the cost of production. If diesel is selling at a lower rate or if the public power supply is available, SME’s will experience business boom and it will reflect on the rate of employment.
“Nigeria’s inflation rate rose to 29.90% in January 2024, from 28.92% in December 2023. This is the highest it has been in two decades. Nigerians are passing through untold hardship and the government should come up with several interventions to ease the pains, but the contrary is the case.
“Succour to Nigerians could be when Dangote refinery is faced with intensive competition by another private owned refinery in Nigeria, that could be when prices of refined petroleum products will be favourable to consumers, until then we shall see obvious exploit by capitalist.”
