The Organization of Petroleum Exporting Countries, OPEC, has absolved Dangote refinery for the hike in the price of fuel in the country.
The was stated by the Secretary General, OPEC. Haitham Al Ghais, in a document published on Tuesday.
According to Al Ghais, the cause of the hike in the pump price of fuel in Nigeria has to do with taxes. These are taxes by the Government and major oil consuming nations.
AL Ghais said, “Revealing the real reasons behind high fuel prices lie elsewhere. Primarily in taxes imposed by Governments, including those of major oil-consuming nations.
The Secretary General explained that crude oil and its derivatives form the backbone of global industries. And it is used in powering everything from transportation to pharmaceuticals.
This is even as many assume that rising oil prices directly benefit oil producers at the expense of consumers. But Al Ghais debunked this myth, noting that oil-producing nations are not the primary beneficiaries of retail fuel sales.
“Revenues are often generated, but they are predominantly earned by major oil-consuming countries through taxation,” Al Ghais highlighted.
The Secretary General emphasized that countries within the OECD (Organization for Economic Co-operation and Development) earn substantially more from the retail sale of petroleum products. This is even as OPEC member countries make minimal profits from the sale of crude oil itself.
“Between 2019 and 2023, OECD nations earned approximately $1.915 trillion more annually than OPEC nations from petroleum products.
“In 2023 alone, taxes accounted for around 44% of the final retail price of petroleum products in OECD countries. And in certain European countries, this figure exceeded 50%.
“For Nigerian consumers, this highlights that the high cost of fuel at the pump is not merely a reflection of crude oil prices or refinery margins. Instead, a significant portion of what consumers pay is directed towards government taxes.
“It is important to recognize that the price paid by consumers at the pump is determined by multiple factors. These include crude oil prices, refining, transportation, and, notably, taxes,” Al Ghais noted.
“In the UK,” for instance, Al Ghais said, “fuel duties are expected to generate £24.7 billion in revenue for the government in 2023-24. This amount to 2.2% of all receipts. Such figures indicate the global trend of governments. Both in producing and consuming nations, leveraging petroleum products for revenue generation.
Al Ghais also underscored that while oil-producing nations do earn revenue from oil sales, a significant portion is reinvested into exploration, production, and infrastructure projects. “This is to ensure the continuous flow of supply to consumers worldwide. This reinvestment is critical for maintaining future oil supplies and stabilizing global energy markets,” he said.
In conclusion, the Secretary General stated that while taxes play a crucial role in supporting government services and infrastructure, they also represent a considerable portion of the price consumers pay at the pump.
Al Ghais, therefore, called for a shift away from the narrative that pits consumers against producers. He emphasized that both groups are stakeholders in the energy ecosystem.
The current fuel price crisis in Nigeria is a stark reminder of the complexity behind fuel pricing. Where taxes, rather than oil producers, bear much of the responsibility for what Nigerians pay at the pump.
source: Channels TV
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