Duke floats N200 petrol plan without subsidy, asks Tinubu to price local crude at cost
By Aboki Forex —
Former Cross River State Governor Donald Duke has urged President Bola Tinubu to change how domestic crude oil is priced, saying petrol can sell for between N200 and N300 per litre without returning Nigeria to a subsidy regime.
Duke, a former Peoples Redemption Party (PRP) presidential candidate, spoke in Abuja. He argued that Nigerian crude belongs to its citizens and that the ongoing fuel subsidy debate misses that point.
Crude allocation for local consumption
Duke said Nigeria produces roughly 1.7 million barrels of crude daily. About 300,000 barrels are needed for domestic consumption, while about 1.4 million barrels are sold commercially.
He said the 300,000 barrels meant for local refining should be sold to local refineries at the actual cost of production, not at international market rates. He said: "We produce about 1.7 million barrels. About 1.4 million barrels we sell commercially. These 300,000 barrels, look at the cost of production, not the international price. While we sell oil at $70 or $80 a barrel, the cost of production may not exceed $40 a barrel. That barrel has about seven by-products."
How by-products can absorb petrol cost
Duke said a single barrel of crude yields about seven by-products. Petrol is just one of them and should not carry the financial burden of the entire barrel, he said.
His proposal rests on selling the other by-products at full commercial rates. He argued that if the five other by-products from a barrel are sold at commercial rates, government can amortise the cost of petrol and still cover refining and distribution.
He said: "Give it to us at the cost of production, not at the market price. Take into cognisance the cost of refining and distribution and put five or 10 per cent above it. Sell the five other by-products from a barrel of crude at commercial rates. You will find that you can easily amortise the petrol and give it to your people at N200 or N300."
What it means for petrol prices
Duke maintained that the strategy would deliver affordable energy, drive economic activity and lower fuel costs without returning Nigeria to what he called the previous, unsustainable subsidy regime.
For consumers and businesses, the proposal targets a pump price of N200 to N300 per litre. Duke said the model would let government sell the five other by-products at commercial rates and add a modest margin of five or 10 per cent above production, refining and distribution costs.