By John Azu
Human rights lawyer, Femi Falana (SAN), has urged the Federal Government to end fuel importation and adopt a domestic production cost-based pricing system to make petrol more affordable for Nigerians.
In a statement on Sunday, Falana criticised the continued use of the Import Parity Price method, which pegs the price of imported petrol to international market rates, arguing that the policy does not serve the interests of Nigerian consumers.
He advocated the adoption of a production cost-based pricing system that takes into account the costs of crude oil production, refining, transportation and distribution within the domestic market.
Commenting on the Federal Government’s 30-day petrol price intervention, which includes a price modulation mechanism with a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol, Falana expressed doubts about its potential benefits to consumers.
He noted that the N66-per-litre discount reportedly offered at Nigerian National Petroleum Company Limited (NNPCL) retail outlets might have a limited impact because of the company’s relatively small share of the country’s filling stations.
“According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigeria has approximately 22,681 registered filling stations nationwide,” he said.
“Since the Nigerian National Petroleum Company Limited operates about 900 filling stations out of the total 22,681 registered filling stations nationwide, how will citizens benefit from the 30-day offer of discount?”
Falana argued that the continued reliance on imported petrol and international pricing was unjustifiable, given Nigeria’s status as a major oil-producing country.
“Notwithstanding that Nigeria is a leading oil-producing nation, the Federal Government has embraced and adopted the Import Parity Price, which confirms that the production and refining of crude oil are done overseas while the PMS is imported into Nigeria.
“It is indisputable that the Import Parity Price method will never reduce the price of petrol sold in Nigeria,” he said.
The senior advocate cited petroleum engineer Professor Izielen Agbon, who has argued that adopting a production cost-based pricing system could bring the price of petrol down to between N435 and N687 per litre, depending on domestic production costs and the prevailing exchange rate.
Falana called on the Federal Government to adopt the alternative pricing model in the public interest, insisting that Nigerians should not have to pay international prices for imported petrol when the country has the capacity to produce and refine its own crude oil.
“The alternative to the Import Parity Price method should be adopted by the Federal Government in the public interest. There is no economic or political justification for selling imported petrol to the Nigerian people at the international price.
“It is time that the Federal Government rejected the demand of the World Bank that Nigeria should continue to import PMS from overseas,” he added.