Human rights lawyer and Senior Advocate of Nigeria, Femi Falana, has called on the Federal Government to end petrol imports and adopt a pricing system that reflects the cost of producing and distributing fuel within the country.
Falana, who chairs the Alliance on Surviving COVID-19 and Beyond, argued that Nigeria should no longer rely on Import Parity Pricing to determine the cost of Premium Motor Spirit (PMS), particularly given its crude oil resources and domestic refining capacity.
His position comes amid continuing public demands for lower petrol prices and reports that the Federal Government is considering a price-modulation mechanism that would place a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol.
Under Import Parity Pricing, domestic fuel prices are linked to the cost of importing petroleum products, exposing consumers to international market conditions. Falana believes a shift to Production Cost Pricing would better reflect the expenses associated with producing and supplying petrol locally.
The lawyer also questioned the reach of a reported 30-day promotional scheme offering a N66-per-litre discount at Nigerian National Petroleum Company Limited (NNPCL) retail outlets. The initiative, he argued, may have limited impact on the wider population because the company’s outlets represent only a small proportion of the country’s registered filling stations.
According to figures attributed to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigeria has approximately 22,681 registered filling stations, while NNPCL operates about 900 outlets. Falana questioned how a temporary price reduction restricted to those stations could provide substantial relief to motorists and other petrol consumers nationwide.
He advocated a pricing model based on the actual costs of crude oil production, refining, transportation and distribution within Nigeria. Citing petroleum engineer Professor Izielen Agbon, Falana said such an approach could potentially bring petrol prices to between N435 and N687 per litre, depending on domestic production expenses and the prevailing exchange rate.
The proposed range, however, depends on the underlying cost assumptions and economic conditions. It represents the estimate cited by Falana rather than a confirmed nationwide pump price.
Falana maintained that Nigeria’s domestic petroleum resources and refining facilities should be reflected in the way petrol prices are determined. He also urged the government to reject what he described as pressure from the World Bank to maintain petrol imports.
His proposal places the focus on whether a locally based pricing formula can deliver meaningful savings to consumers while accounting for the costs of production and distribution.
