Accord Party presidential aspirant, Gbenga Olawepo-Hashim, has criticised Nigeria’s fuel pricing system, describing the long-running subsidy debate as “accounting magic” during an interview on Channels Television’s Politics Today.
Hashim argued that petrol is expensive because of the way the government prices domestically produced crude oil, saying Nigeria should not apply international crude prices to oil supplied for local consumption.
“The truth of it is that the price is currently inflated. By who? By the government,” Hashim said.
He said domestic crude was priced at about $30 per barrel, based on figures he attributed to the Nigerian National Petroleum Company Limited.
The Accord chieftain compared this with Saudi Arabia, where he said crude production costs about $10 per barrel.
Hashim proposed adding a $15 margin to the $30 production cost, with about $5 for refining and $7 for transportation and insurance.
According to his calculation, the total would amount to about $57 per barrel.
He said this could translate to a petrol price of about 34 cents, or approximately N501 per litre, using an exchange rate of N1,400 to the dollar.
Hashim said his proposed pump price of N605 per litre would include an additional energy tax of about N100.
He said the tax could be channelled into developing alternative energy sources.
The presidential aspirant said the subsidy debate should instead focus on the accounting and pricing framework surrounding domestic crude.
“What you have had really has never been any subsidy, even when we had lower pump petrol prices. The subsidy issue is more of an accounting magic,” he said.
Hashim argued that crude supplied to the domestic market should not automatically be priced at the same level as crude sold internationally.
“You cannot price your local products at international price,” he said.
He cited Saudi Arabia and Kuwait as examples of oil-producing countries that, according to him, adopt different approaches to domestic crude pricing.
Hashim called for greater scrutiny of Nigeria’s oil production costs and the basis for the domestic crude price.
He said questions should be answered about the cost of producing a barrel of crude in Nigeria.
“If anyone has a different idea, they should bring their books. Let’s see what it is, how much it costs to produce a barrel of crude in Nigeria,” he said.
