The Nigerian Association for Energy Communications (NAEC) has sought to clear the air on growing confusion surrounding Nigeria’s downstream petroleum sector. In a speech delivered on October 3, 2024, NAEC highlighted critical facts about the industry, focusing on recent developments and widespread misconceptions.

The speech, aimed at addressing public anxiety, outlined several key points on the state of the Nigerian oil market, especially in light of the Dangote Refinery’s production of distillates and gasoline. The association emphasized that, although the market is dynamic and undergoing significant changes, it can be easily understood by focusing on the roles of key players and their economic incentives.

NAEC also responded to various speculations circulating in the media, including rumors that Dangote’s gasoline production would lead to a dramatic price drop. The association debunked this notion, stating that oil products, including gasoline, are priced in U.S. dollars globally, and any local sales must reflect the Naira’s current exchange rate. As a result, the refinery cannot be expected to sell at a price below market value.

The NAEC speech further stressed the importance of economic fundamentals, explaining that the primary reason for recent price hikes in petroleum products is the depreciation of the Naira. As the currency falls, the cost of imported goods, including fuel, rises in proportion.

The address also shed light on the role of the Nigerian National Petroleum Corporation Limited (NNPCL), which is tasked with managing national oil policy. It noted that although Dangote Refinery has some government investment, it remains a privately-controlled venture, with investors expecting market returns on their products.

In conclusion, NAEC called for action to restore global confidence in Nigeria’s economy and currency, underscoring that long-term stability in fuel prices will only be achieved through foreign investment, fiscal discipline, and boosting local production capacity. The speech reinforced that confusion can be avoided if the public better understands the economic realities driving the oil market.

The message was clear: while policy changes and local production from the Dangote Refinery are important, the root cause of price fluctuations lies in the broader economic environment.