Businessman and politician Gbenga Olawepo-Hashim has argued that petrol could sell for N600 per litre in Nigeria without government subsidy if the pricing of crude allocated for domestic refining is properly structured.
Olawepo-Hashim, who reportedly made the submission during a September Diaspora Dialogues podcast, based his argument on figures from his experience as a crude oil producer and oil and gas business owner.
He maintained that the cost of petrol should be determined after taking into consideration expenses across the upstream and downstream sectors, as well as reasonable profit margins.
His position is that petrol should not cost more than N600 per litre at the pump, whether it is produced from locally refined crude or imported.
A major component of his argument is the need for Nigeria to allocate a portion of its crude production for domestic refining.
He argued that such crude should be sold to domestic refiners at a lower price than crude exported to the international market.
Olawepo-Hashim also cited the practice of other members of the Organisation of Petroleum Exporting Countries, which he said have arrangements for supplying crude to their domestic markets at prices different from those applicable to exports.
The argument effectively challenges the way Nigeria’s fuel pricing debate has traditionally been framed around the question of whether the government should retain or remove petrol subsidy.
Rather, Olawepo-Hashim wants the focus shifted to determining the actual cost of producing and distributing petrol in the country.
In a recent interview with Channels TV, Olawepo-Hashim has taken a similar position. He had said petrol should cost around ?500-605 based on actual domestic production costs plus reasonable margins and a modest energy tax. According to him the current high prices and the entire subsidy story were government-driven accounting fiction.
‘It’s not… It’s not magic. The truth of it is that the price is currently inflated,’ he had said.