Oyo State Governor and African People’s Movement presidential candidate, Seyi Makinde, has called for a fundamental rethink of how petrol prices are determined in Nigeria, saying the country’s fixation on whether subsidy should return or remain removed is distracting from the bigger issue.
Makinde argued that the central concern should be whether Nigeria, as an oil-producing nation, operates a pricing system that is transparent, predictable and capable of delivering a fair return to its citizens. He made the position known in the September edition of his newsletter, The Business of Governance, released on Friday.
According to him, Nigerians should not be left to speculate about what drives petrol prices at the pump. He said the pricing mechanism ought to openly account for the crude oil benchmark used, refining expenses, margins, exchange-rate assumptions, transportation and distribution costs, taxes and other applicable charges.
The governor also took issue with the argument that domestic petrol prices must be pushed upward to make fuel smuggling to neighbouring countries unprofitable. He maintained that such a policy effectively transfers the consequences of weak border controls to ordinary Nigerians.
Makinde said Nigerians should not be compelled to pay more for petrol because the government has been unable to prevent products from being moved illegally across the country’s borders. In his view, border security and petroleum pricing should be treated as separate policy questions rather than using higher pump prices as a solution to smuggling.
He consequently urged policymakers to move the national conversation away from the familiar subsidy-versus-no-subsidy debate. He said the more fundamental question was whether the existing pricing structure was appropriate for a country that produces crude oil and expects its citizens to benefit from that resource.
The governor further argued that Nigeria’s petroleum policy should reflect the interests of the people who own the country’s natural resources, insisting that the pricing framework must allow citizens to derive a reasonable and transparent benefit from the nation’s oil wealth.
Makinde said he would unveil an alternative petroleum pricing framework in the coming weeks, inviting Nigerians to scrutinise the proposal and judge whether it offers a more sustainable and equitable approach to determining petrol prices.
