Former Governor of Cross River State, Donald Duke, has said he does not believe in fuel subsidy, arguing that Nigerians should benefit from the country’s crude oil at the cost of production rather than international market prices.
themomentng reports that the 2027 presidential candidate of the Peoples Redemption Party (PRP) made the position known while explaining his understanding of subsidy and how Nigeria could reduce the cost of petrol for consumers during an interview with Vanguard.
He illustrated his argument with the example of water, saying subsidy occurs when a product is purchased at a particular price but sold below that price because consumers cannot afford the original cost.
“I don’t believe there should be subsidy and I have spoken on this in several forums.
“If, for instance, you buy water at N10 and Nigerians cannot afford to pay N10 for it, and you decide that you’re going to give them at N5, then you’re subsidizing the water. That’s the ordinary meaning of subsidy,” Duke said.
He said the same principle should apply when considering the cost of Nigeria’s crude oil, stressing that the country should focus on its production cost rather than the international price.
“This oil is our own, right? It belongs to all of us. It’s our common wealth. Don’t look at the price of the oil in the international market,” he said.
According to him, Nigeria needs about 300,000 barrels of crude oil daily but produces about 1.7 million barrels, with about 1.4 million barrels sold commercially.
Duke argued that the cost of producing a barrel of crude oil in Nigeria should be the basis for determining the price of petroleum products for Nigerians, not the international market price.
“We sell crude oil at today $70 or $80 a barrel, the cost of production may not exceed $40 a barrel,” he said.
He noted that a barrel of crude oil produces about seven byproducts, including diesel, petrol, aviation fuel and kerosene.
Of these, he identified diesel and petrol as the key products that should be made available to Nigerians at the cost of production, while others can be sold at international prices.
“Diesel and petrol are the key ones, let government give them to us at the cost of production, not at the market price but take into cognizance the cost of distribution and put 5% or 10% above,” Duke said.
He proposed that the other five byproducts should be sold at commercial rates, arguing that the revenue generated could help reduce the effective cost of petrol.
According to him, with this method, Nigerians can buy a litre of petrol between ₦200 and ₦300.
“Sell the five other byproducts from a barrel of crude at commercial rates. If this is done, you would find that you can easily amortize this petrol, and give it to your people at N200 or N300 per litre,” he said
