Hashim-Olawepo: Petrol Can Drop to N200/litre Without Cutting FAAC Revenue

• Accord candidate pegs starting sustainable price at N605/litre

•Targets exchange rate of N525-N700 to dollar

Emmanuel Addeh in Abuja

Presidential Candidate of the Accord Party, Dr Gbenga Hashim-Olawepo, has said petrol could eventually sell for as low as N200 per litre without reducing government revenue or Federation Account Allocation Committee (FAAC) allocations, arguing that Nigeria can achieve cheaper energy while strengthening public finances.

Hashim-Olawepo, who put the starting sustainable price of petrol under an Accord administration at N605 per litre, said the target would be achieved by reducing the cost of petroleum production and stabilising the exchange rate rather than through an opaque subsidy regime.

“N605 per litre is our starting sustainable price for petrol. Nobody will buy petrol above N610 under our government. It could be as low as N200,” he said in a statement yesterday.

The Accord presidential candidate, who has consistently opposed the removal of the petrol subsidy, said Nigeria needed to establish the actual cost of producing, refining, transporting and distributing petrol before determining whether the government was subsidising consumers.

He described the previous justification for subsidy removal as “accounting magic”, arguing that comparing domestic petroleum costs with international benchmarks could give a misleading impression of the actual cost to the Nigerian economy.

“Any time you sell a product above its legitimate cost of production, refining, transportation and insurance, you cannot call the difference between that price and an international benchmark a subsidy loss. That is opportunity cost,” he said.

According to him, Nigeria should not automatically regard the difference between international prices and the domestic cost of petroleum products as a subsidy loss where the country is using its own crude resources to provide affordable energy to its citizens.

Hashim-Olawepo called for an independent forensic audit of the petroleum value chain to establish the actual cost of producing and delivering every litre of petrol consumed in Nigeria.

He said the audit should cover crude oil production, contracting, procurement, refining, transportation, storage, insurance, pipeline operations and distribution.

“Show Nigerians the books. Publish the production cost. Publish refinery cost. Publish transportation. Publish insurance. Publish every margin. Let the data speak,” he said.

He also questioned Nigeria’s relatively high oil production costs compared with other major oil-producing countries, saying contracting practices, procurement, insecurity, operational inefficiencies and possible cost inflation should be investigated.

“Before asking Nigerians to pay more, the government must first explain why it costs so much to produce our own oil. If the cost is genuine, show us the evidence. If it is inefficiency, corruption or inflated contracting, fix it,” he said.

Hashim-Olawepo argued that Nigerians were effectively paying twice for inefficiencies in the petroleum sector, first through inefficient or inflated production costs and subsequently through higher prices at the pump.

“The Nigerian people should not pay for inefficiency twice. They should not pay for inflated costs inside the system and then be told that the resulting high price is the inevitable consequence of subsidy removal,” he said.

He said his proposed petrol pricing framework would be based principally on an appropriate production cost and an appropriate exchange rate.

Hashim-Olawepo said an Accord government would target an exchange rate of between N525 and N700 to the dollar, arguing that exchange-rate stability would reduce the naira cost of petroleum-sector inputs and improve economic competitiveness.

He stressed that lower petrol prices would not be achieved by sacrificing government revenue or reducing FAAC allocations.

“The reduction will not be at the detriment of government revenue or below current FAAC. We are not going to make petrol cheaper by making the government poorer,” he said.

According to him, the objective would be to reduce the underlying cost of production rather than shift the burden from consumers to government or from government to consumers.

He argued that lower energy costs would stimulate economic activity by reducing transportation and manufacturing costs, increasing household purchasing power and expanding the economic base from which the government generates revenue.

“Our objective is not simply cheap petrol. Our objective is a productive Nigerian economy in which affordable energy, stronger production and stronger government revenue reinforce one another,” he said.

Hashim-Olawepo said the N200 to N300 per litre price range should be seen as a potential medium-term outcome of correcting Nigeria’s economic fundamentals rather than an arbitrary political promise.

“N605 is the starting sustainable price. If we get production costs right and achieve the exchange-rate target, the price could come down to N200 or N300,” he said.

He said an Accord administration would also accelerate domestic refining, improve transparency across the petroleum value chain and eliminate waste and leakages.

Hashim-Olawepo maintained that government intervention in petrol pricing should not automatically be regarded as illegitimate, provided it was transparent, targeted and accountable.

“The issue is not whether the government can intervene. The issue is whether government intervention is transparent, productive and accountable. Subsidy should protect Nigerians and the productive economy, not enrich intermediaries,” he said.

He urged Nigerians to shift the petrol pricing debate from political arguments to verifiable data, saying the country needed to know the actual cost of producing and delivering petroleum products.

“Let the data speak. Tell Nigerians exactly what it costs to produce the crude, what it costs to refine it, what it costs to transport it and what every margin represents. Then we can have an honest conversation about subsidy,” he said.

Hashim-Olawepo said the 2027 election should ultimately be a contest over competing economic models rather than personalities.