The UN World Economic Situation and Prospects (WESP) report for 2024 says the reduction in fuel cost will come amid the country’s quest to increase in-country oil refining.
“Efforts to increase in-country oil refining capacity would likely reduce domestic fuel costs in 2024 and beyond.” the report noted.
The WESP report comes amid Nigeria’s effort to build up domestic refining with the completion of the $20 billion Dangote Refinery, and the lifeline given to some modular refineries.
According to the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote, Nigeria’s combined oil refining capacity has been projected to hit 1.5 million barrels per day (mbd) by 2025.
Currently, the existing refineries in the country have a capacity of 445,000 barrels per day and the targeted expansion of refining capacity to 1.5 mbd will greatly facilitate the country’s aim to meet its domestic fuel demand and potentially allow for the export of refined products.
The increase in refining capacity has been hinged on the production capacity of various refinery projects across the country, including the Dangote Refinery, Bua Group Refinery project, Waltersmith Modular Refinery, Duport Midstream Refinery, OPAC Refinery, Edo Refinery, Aradel Holdings Refinery, and the existing Kaduna, Warri, and Port Harcourt refineries.
The price of PMS skyrocketed by over 200% soon after the FG removed subsidies on the product in May 2023.
Although Nigeria is still accounted as having one of the cheapest petrol prices globally, the sharp increase has left many consumers and businesses in despair following the harsh economic realities.
According to the Nigerian Bureau of Statistics (NBS), Nigeria’s inflation rate currently stands at 28.2% with a public debt of ₦87.38 trillion in Q2, 2023, up from ₦49.85 trillion in Q1.
The report, however, mentioned that despite its predicted GDP growth rate, Nigeria's increasing public debt, persistent inflation as well as the rising cost of living pose serious risks to the country’s economy this year.