Mr Viral
The National Institute for Policy and Strategic Studies (NIPSS) has projected a significant reduction in the price of Premium Motor Spirit (PMS), commonly known as petrol, as local refineries, including the Dangote Refinery, ramp up production.
The Director-General of NIPSS, Ayo Omotayo, made this assertion on Tuesday during an appearance on Channels Television’s The Morning Brief, stating that while the removal of fuel subsidies by President Bola Tinubu’s administration initially triggered a sharp price increase, relief is on the horizon.
“With the removal of the fuel subsidy, we have Dangote Refinery coming on board. We have other refineries, including the Port Harcourt refinery, which has operated continuously for 110 days. These are the short-term gains,” Omotayo said.
He expressed optimism that, despite the current price surge—where petrol sells for approximately ₦930 per litre, depending on location—prices would decline as domestic refining capacity increases.
“We are currently buying fuel at a higher price, but at the National Institute, our prediction is that if we continue on this trajectory, fuel prices will naturally drop. We anticipate it could fall to as low as ₦750 per litre before the end of the year. Additionally, we foresee a drop in foreign exchange rates to about 1.3 before the year ends, and as more of our refineries become operational, Nigeria will ultimately become a net exporter of refined petroleum products,” he stated.
Omotayo acknowledged that the transition period has been challenging but maintained that the long-term benefits would outweigh the short-term sacrifices.
“The gains at this stage may seem minimal, but in the long run, Nigerians will reap the rewards of the difficult choices being made today,” he added.
President Tinubu’s removal of fuel subsidies marked the end of a long-standing government policy that kept fuel prices artificially low through costly crude-for-gasoline swaps. The subsidy system drained national revenue, depleted foreign reserves, and contributed to mounting debt. Tinubu, who had campaigned on ending the practice, declared during his inauguration that “the fuel subsidy is gone.”
The abrupt change led to immediate panic and a nationwide spike in fuel costs, exacerbating economic hardship for many Nigerians.
However, Omotayo defended the decision, asserting that the subsidy removal was essential to avert an economic collapse.
“For us at the National Institute, it was a timely and necessary step taken by Mr. President, which has played a crucial role in saving Nigeria from financial ruin,” he said.
“We were on the brink of collapse due to unsustainable subsidy payments. The amounts were simply unimaginable, and in some cases, we were subsidizing fuel as far as Burkina Faso and Sierra Leone. A government that aims for long-term success must make tough choices. At NIPSS, we commend the President for taking this decisive action, even though it may seem harsh to many Nigerians who feel they needed more time to adjust.”
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