DPR: Without Alternative Energy, Petrol Price Will Rise on Subsidy Removal

The Department of Petroleum Resources (DPR) has warned that the pump price of petrol in the country may rise up to as much as N1000 per litre when petrol subsidy regime comes to an end without an alternative energy source.

The DPR stated this just as some oil and gas experts have advocated for a measure from the government that will ensure that Nigeria gets commensurate value from its abundant oil and gas resources like its fellow oil producing nations.

The Director of DPR, Mr. Sarki Auwalu, said this while responding to questions and comments generated by a paper he delivered in Lagos, recently, at the Second Quarter, 2021 Business Dinner of Petroleum Club Lagos.

The topic of the paper was, “A Discussion on the Future of the Nigerian Petroleum Industry.”

The questions and comments came from a former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funsho Kupolokun; political economist and Founder of Centre for Values in Leadership, Prof. Pat Utomi; Production Geologist at Shell Nigeria, Mr. Adedoyin Orekoya; and Chairman of AA Holdings, Mr. Austin Avuru; amongst others.

Responding to the subsidy concerns and the disparity in the petrol consumption figures given by NNPC and the DPR, as raised by Orekoya, Auwalu, acknowledged that Nigeria was spending so much on petrol subsidy.

He said eliminating it would require making alternative fuel available to Nigerians and that failure to do that will plunge Nigerians into paying higher petrol prices when subsidy is removed.

He stated that Nigerians may be paying as high as N1, 000 to buy one litre of petrol in the country when subsidy on petrol is removed and when the alternative energy or autogas gas policy becomes fully operational.

He, however, said the alternative fuel regime comes with initial cost as it will lead to spending $400 to convert one vehicles from running on petrol or diesel to running on either Liquefied Natural Gas (LNG) or Compressed Natural Gas (CNG).

Auwalu maintained that converting eight million public vehicles currently present in Nigeria to gas-powered will cumulatively cost $3.2 billion to achieve.

He said: “So, to eliminate subsidy, they don’t call it subsidy anymore now, it’s under-recovery of purchase. So, to eliminate under-recovery, what you need is