Sets Out Exchange Rate, Cost Figures Behind Proposal
Presidential candidate of the Accord Party, Dr Gbenga Olawepo-Hashim, has said his proposed ₦605 per litre petrol price is only the starting point of a broader energy policy that could eventually reduce the pump price to between ₦200 and ₦300 per litre.
Dr Olawepo-Hashim, who has been campaigning on an energy security-first agenda, said Nigeria could achieve cheaper petrol without returning to what he described as the opaque subsidy regime that existed before the 2023 petroleum pricing reforms.
The energy executive, in a statement issued on Monday, said the fundamental question Nigeria should address is not simply how much petrol sells for internationally, but how much it actually costs the country to produce crude oil, refine it and deliver the finished product to Nigerian consumers.
According to Dr Olawepo-Hashim’s campaign, its cost model is based on a domestic crude production cost of $45 per barrel, comprising an estimated industry cost ceiling of $30 and a $15 margin.
The campaign explained that additional costs, including refining at approximately $5 per barrel as well as distribution, transportation and insurance estimated at about $7 per barrel, bring the total benchmark cost to approximately $57 per barrel.
Using the 159-litre volume of a standard barrel of crude as a benchmark, the campaign said the calculation translates to approximately $0.35 per litre. At an illustrative exchange rate of ₦1,400 to the dollar, this would amount to about ₦500 per litre.
However, the campaign acknowledged that the calculation is intended as a benchmark rather than a complete refinery yield calculation, noting that a barrel of crude oil does not produce 159 litres of petrol alone.
Instead, crude oil is refined into a basket of products, including petrol, diesel, aviation fuel, Liquefied Petroleum Gas, LPG, and other refinery outputs.
His broader argument rests on reducing the underlying cost of Nigeria’s petroleum system and establishing a more transparent basis for determining how much Nigerians should pay for energy.
The position has attracted fresh attention following his declaration that an Accord administration in 2027 would ensure that Nigerians do not pay more than about ₦605 to ₦610 per litre for petrol at the beginning of its tenure.
The Accord Presidential candidate called for an independent forensic audit of Nigeria’s entire petroleum value chain, covering crude exploration and production, contracting, procurement, security, transportation, refining, storage, insurance, pipelines and distribution.
He said the exercise should establish the actual cost of producing and delivering petroleum products instead of automatically relying on international benchmark prices.
“Show Nigerians the books. Publish the production cost. Publish refinery cost. Publish transportation. Publish insurance. Publish every margin. Let the data speak.”
The Presidential Candidate questioned whether Nigerians should automatically bear every international opportunity cost attached to crude produced within the country, arguing that Nigeria must distinguish between the actual cost of producing energy and the international market value of its natural resources.
He described the conventional justification for subsidy removal as “accounting magic,” arguing that selling a domestically produced product below its international opportunity price does not, by itself, mean that government is subsidising the product.
Dr Olawepo-Hashim said Nigeria’s growing refining capacity presents an opportunity to fundamentally change the economics of the country’s petroleum sector.
He proposed greater support for large-scale and modular refineries, regional refining facilities, petrochemical plants, storage infrastructure and crude evacuation systems.
According to him, domestic refining should go beyond eliminating imports and should help lower energy costs, retain value within the Nigerian economy and create a stronger platform for industrialisation.
“We must stop exporting cheap energy and importing expensive products. Nigeria must refine more, manufacture more and export more value-added energy products,” he said.
Dr Olawepo-Hashim added that refinery capacity alone would not solve Nigeria’s energy challenges if domestic refineries could not access adequate crude oil at competitive prices.
Exchange Rate Component
He also identified exchange rate stability as a major component of his energy proposal.
He proposed an exchange rate range of approximately ₦525 to ₦700 to the dollar, arguing that a stronger and more stable naira would reduce the domestic cost of imported equipment, technology and other dollar-linked inputs used across the energy sector.
According to him, the combination of lower crude production costs, efficient domestic refining and a stronger naira could eventually move the price of petrol towards ₦200 to ₦300 per litre.
Dr Olawepo-Hashim said the objective of the policy is not merely to make petrol cheaper but to ensure that lower energy costs translate into reduced costs of transportation, agriculture, manufacturing, mining and other productive sectors of the economy.
He argued that government should ultimately generate more revenue from an expanding and productive economy rather than relying heavily on high energy prices.
“The best revenue strategy is not to make everything expensive. It is to make Nigerians more productive and our manufacturers more competitive,” he said.
The Accord Presidential Candidate said the 2027 presidential election should provide Nigerians with an opportunity to examine competing economic models rather than simply competing personalities.
He said his administration would judge its energy policy not only by the amount of revenue generated from petroleum but also by whether Nigerians become more productive as energy becomes more affordable.