The Chairman of the Alliance on Surviving COVID-19 and Beyond (ASCAB), Femi Falana (SAN), has urged the Federal Government to stop importing Premium Motor Spirit (PMS), popularly known as petrol, and adopt a domestic production cost pricing model to reduce its price in Nigeria.

He added that that domestic production and refining costs should guide pricing decisions.

Falana said the government should abandon the Import Parity Price method, which he argued encourages fuel importation and exposes Nigerians to international prices despite the country’s crude oil resources and domestic refining facilities.

His call comes amid public demands for a reduction in petrol prices and the Federal Government’s reported plan to introduce a price-modulation mechanism with a proposed ceiling of N1,350 per litre on the ex-gantry or landing cost of the product.

He also referred to a reported 30-day promotional programme under which the Nigerian National Petroleum Company Limited (NNPCL) retail outlets are offering a N66-per-litre discount on petrol.

However, Falana questioned the extent to which Nigerians would benefit from the offer, given the number of filling stations operated by the national oil company compared with the total number of registered outlets nationwide.

According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigeria has approximately 22,681 registered filling stations, while NNPCL operates about 900 outlets.

Falana asked how citizens could benefit substantially from the temporary discount when the company’s retail stations account for only a fraction of the registered filling stations across the country.

He argued that adopting the Import Parity Price method would not deliver a substantial reduction in petrol prices because the approach links domestic prices to the cost of importing the commodity from overseas.

He urged the government to replace it with Production Cost Pricing, which he said would be based on the costs of crude oil production, refining, transportation and distribution within Nigeria.

According to him, the approach would reflect the cost of producing and refining crude oil domestically rather than pricing petrol as an imported commodity.

Falana cited petroleum engineer, Professor Izielen Agbon, who has argued that adopting the Production Cost Pricing method could bring petrol prices down to between N435 and N687 per litre, depending on domestic production costs and the prevailing exchange rate.

He said the Federal Government’s experts had not challenged Agbon’s claims, which he described as different from the solutions proposed by President Bola Tinubu and leading opposition presidential candidates.

Falana also cautioned the government against dismissing alternative economic policies, recalling arguments associated with the Structural Adjustment Programme (SAP) that there was no alternative to the policy.

He maintained that other options were available to address Nigeria’s current economic challenges, urging the government to consider alternative economic perspectives in determining petrol prices.

“The alternative to the Import Parity Price method should be adopted by the Federal Government in the public interest,” he said.

Falana further argued that there was no economic or political justification for selling imported petrol to Nigerians at international prices.

He called on the government to reject what he described as the World Bank’s demand that Nigeria should continue importing PMS, insisting that domestic production and refining costs should guide pricing decisions.

The ASCAB chairman said the proposed alternative pricing model should be considered as part of efforts to address public concerns over petrol prices and the cost of living.