The Department of Petroleum Resources, DPR, has on Monday, said that the pump price of petrol may rise to N1,000 per litre very soon, when the subsidy regime comes to an end, without an alternative energy source, Page 36 learnt.
The Director of the DPR, Sarki Auwalu, made this known while responding to questions and comments generated by a paper he delivered in Lagos, recently, at the Second Quarter of the 2021 Business Dinner of Petroleum Club, Lagos.
Responding to the subsidy concerns, Auwalu acknowledged that Nigeria is spending so much on petrol subsidy.
He said that eliminating it completely would require making alternative fuel available to Nigerians, adding that, failure to do that could plunge Nigerians into paying very higher prices for petrol, when subsidy is removed.
A statement on the DPR website titled: ‘DPR: Without Alternative Energy, Petrol Price Will Rise On Subsidy Removal’, reads:
“So, to eliminate subsidy, they do not call it subsidy anymore now, it is under-recovery of purchase. So, to eliminate under-recovery, what you need is alternative fuel. Without an alternative, you will subject people to higher prices and that is why we go for price freedom.
“As at today, there are 22 million cars in Nigeria. 8 million are for public use. Imagine if you want to convert every car into gas, the average cost of conversion is $400. Converting 8 million cars requires $3.2 billion. To do that, there are a lot of environmental investors which can invest and recover from the sale of gas, and we are encouraging that.
“Once that is achieved, you will see that PMS can be sold at N1,000. After all, the average distance covered by one-gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility is 2.7 against one. One for PMS, 2.7 for LNG or CNG.
”So, with that advantage, you will see that it creates an opportunity for this industry again. The issue of subsidy, the volume will all vanish and that is what we are working towards.”