Former Governor of Cross River State and 2027 Peoples Redemption Party (PRP) presidential candidate, Donald Duke, has put forward a bold proposition for Nigeria’s energy crisis: citizens can buy petrol for between ₦200 and ₦300 per litre without government subsidies.

 

Speaking in an interview with *Vanguard*, Duke argued that the core issue is not subsidy removal, but how Nigeria prices its domestic crude oil for local consumption.

 

#### **Cost of Production vs. International Market Price**

 

Duke explained that true subsidy occurs when government buys a product at market value and sells it below cost. However, because Nigeria owns its crude oil, domestic pricing should be based on **production cost**, not international benchmark prices like $70 or $80 per barrel.

 

* **Production Realities:** Nigeria produces roughly 1.7 million barrels of crude oil per day and consumes approximately 300,000 barrels domestically.

* **The Cost Difference:** Producing a barrel of crude in Nigeria costs under $40. Selling that crude to local refineries at production cost—rather than international market rates—instantly lowers processing expenses.

 

#### **The 7-Byproduct Amortization Strategy**

 

A single barrel of crude oil yields about seven refined products, including petrol, diesel, aviation fuel, and kerosene. Duke suggests a strategic split in how these products are commercialized:

 

1. **Subsidize Nothing, Price for Access:** Supply the two most essential fuels for public transport and industry—**petrol and diesel**—at the cost of production, plus a modest 5% to 10% margin for distribution and logistics.

2. **Monetize the Rest:** Sell the remaining five refined byproducts at full international commercial rates.

3. **Offset the Difference:** Revenues generated from selling those high-margin byproducts at market value would absorb processing overheads, naturally bringing domestic petrol prices down to ₦200–₦300 per litre.

 

By shifting from an international benchmark model to a cost-of-production framework, Duke maintains that Nigeria can make energy affordable for its citizens while eliminating the need for costly state subsidies.