According to the Department of Petroleum Resources (DPR), if the fuel subsidy system ends without an alternative energy source, the pump price of petrol might rise to N1000 per litre.
DPR Director, Sarki Auwalu, said this at the Petroleum Club Lagos’ Second Quarter 2021 Business Dinner, according to Mirror Nigeria.
According to a statement on the DPR website on Monday titled, ‘DPR: Without Alternative Energy, Petrol Price Will Rise On Subsidy Removal’, Auwalu said eliminating petrol subsidy would require making alternative fuel available to Nigerians.
He added that failure to do that could plunge Nigerians into paying higher petrol prices when the subsidy is removed.
“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,” he said.
Read Also: Police probes killing of RCCG pastor
“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.”