Financial Energy Review
……by Ben Ndubuwa….
The Chief Executive Officer (CEO) of Pinnacle Oil and Gas Limited Robert Dickerman said that the downstream sector of the Nigerian oil and gas industry is undergoing substantial shifts with its attendant challenges since the removal of subsidy.
Dickerman, noted that this has set the stage for “a critical moment of reflection” on Nigeria’s fuel market, prices, and broader economic health.
“Previously, we had one bulk supplier managing imports, which led to inefficiencies in distribution and an unaffordable FX subsidy. This created severe economic strains for marketers and strong incentives for smuggling subsidized products into neighboring countries.” Dickerman Saidi.
Speaking at the ongoing African Oil Trading Logistics (OTL) conference, in Lagos, themed “Alliances for Growth – Markets, Operations and Policy,” Dickerman said that the shift to market-driven pricing, has led to gasoline prices reaching global levels. “The only difference now between prices in Nigeria and in neighboring countries is tax,” he said, adding that this change “removes the financial burden from the Nigerian National Petroleum Corporation (NNPC) and the federal government.” However, he cautioned that the new market prices are “significantly higher than the subsidized prices, which remains a challenge for many Nigerians whose economic conditions have not improved.”
On the driving factor behind fuel prices, the Pinnacle CEO, clarified a common misconception, stating, “The biggest driver of fuel prices in Nigeria is not government policy or crude oil prices—it’s the exchange rate of the Naira. All petroleum products sold in Nigeria are priced in U.S. dollars and converted to Naira at market rates, making the FX rate critical.”
Looking forward, Dickerman underscored the need to improve the economic value of the Naira, suggesting that fiscal prudency, enhanced revenue collection, export development, and support for monetary policy were essential steps.
He urged Nigerians to consider how different factors—like refining capacity, supply and demand, government policies, and market participants—play into achieving economic growth and reducing poverty.
Citing Fareed Zakaria, he concluded, “The number one lesson from decades of economic policy is that countries embracing free markets and trade grow the fastest, raising their people’s standard of living the most.”
Dickerman underline the importance of a cohesive approach to fuel pricing and currency stability as Nigeria seeks sustainable economic development.
