Oil Producers Not to Blame for Fuel Price Hike in Nigeria – OPEC
The Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, has said that oil producers are not responsible for the hike in fuel prices in Nigeria.
According to OPEC, the real reasons behind high fuel prices lie elsewhere, such as in taxes imposed by governments, including those of major oil-consuming nations.
Crude oil and its derivatives form the backbone of global industries, powering everything from transportation to pharmaceuticals.
While many assume that rising oil prices directly benefit oil producers at the expense of consumers, the OPEC chief 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.
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, including crude oil prices, refining, transportation, and, notably, taxes,” Al Ghais pointed out.
In the UK, for instance, fuel duties are expected to generate £24.7 billion in revenue for the government in 2023-24, amounting 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 to ensure the continuous flow of supply to consumers worldwide.
This reinvestment is critical for maintaining future oil supplies and stabilizing global energy markets.
Last line, 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.
The OPEC Secretary General called for a shift away from the narrative that pits consumers against producers, emphasizing that both groups are stakeholders in the energy ecosystem.
