The Department of Petroleum Resources (DPR) has hinted about the possible rise in the pump price of Premium Motor Spirit (PMS) otherwise known as petrol to N1,000 per litre.
The Director of DPR, Sarki Auwalu, hinted this during a paper presentation at the Second Quarter 2021 Business Dinner of Petroleum Club in Lagos.
Auwalu said the increase in the pump price of petrol to around N1,000 per litre is unavoidable if the Federal Government ends the subsidy regime without an alternative energy source.
He stressed that in spite of the hike in fuel price, the government still spends heavily on subsidy.
Auwalu 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 alternative fuel. Without an alternative, you will subject people to higher prices and that is why we go for price freedom.
“As at today, there are 22 million cars in Nigeria. Eight million are for public use. Imagine if you want to convert every car into gas, the average cost of conversion is $400. Converting eight million cars requires $3.2 billion. To do that, there are a lot of environmental investors which can invest and recover from the sale of gas and we are encouraging that.
“Once that is achieved, you will see that PMS can be sold at N1,000. After all, the average distance covered by one-gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility is 2.7 against one. One for PMS, 2.7 for LNG or CNG.
“So, with that advantage, you will see that it creates an opportunity for this industry again. The issue of subsidy, the volume will all vanish and that is what we are working towards.”