With Dangote Pe t ro l e u m R e f i n e r y commencing partial production by utilising 350,000 barrels of oil per day (bopd) out of its 650,000bopd and also inviting about 10 oil marketers, the Lagos Chamber of Commerce and Industry (LCCI), has hinted that Nigerians should expect dramatic reduction in the pump price of Premium Mo- tor Spirit (PMS), other- wise known as petrol at various filling stations across the country soon.
The President of Lagos Chamber of Commerce and Industry, Mr Gabriel Idahosa, dropped this hint in his address on the state of the economy for the first quarter 2024. He said that Dangote Petroleum Refinery beginning production was a good sign for Nigeria and the economy in short and long- terms as it is expected to make a major impact on the country’s Gross Domestic Product (GDP) and foreign exchange earnings.
Idahosa said: “You should not expect a dramatic reduction in the prices of Diesel (Automotive Gas Oil) and Aviation fuel (Jet A1) now from the Dangote refinery, because, Dangote is starting and is not producing PMS now. But we expect some reduction in the price of PMS soon. “So, we expect a moderate reduction in the price of petrol. What that says is that we are not going to see further dramatic rise in inflation rate this year, because the drivers of those inflation rate are making U-turn.”
Speaking further, the LCCI president stated that decelerating and low growth in manufacturing and trade largely reflect the deregulation of the downstream oil sector and high energy cost (cost of diesel and electricity tariff), exchange rate volatility, continuous rise in interest rate, high inflation and weak consumer demand. According to him, these macroeconomic factors are expected to further weigh on the growth prospect of the sector.
He, however, pointed out that in the short-term growth in manufacturing is expected to remain weak due to squeezed consumer spending, while the outlook in the medium-term is projected to improve due to subsidy removal, adding: “This may attract investment in oil refining and other opportunities in the sector as well as ease price pressures which is expected to boost real wages and increase disposable income.”
