Fuel Can Sell for N605 Per Litre and Subsidy Is ‘Accounting Magic’, Says Gbenga Olawepo-Hashim

Accord Party politician and former presidential candidate Gbenga Olawepo-Hashim has stirred up a massive debate across Nigeria after declaring that petrol can easily sell for N605 per litre. Speaking during an interview on Channels Television, he argued that the high pump prices Nigerians face today are not caused by economic realities, but by how the government chooses to calculate the cost of local crude oil.

Olawepo-Hashim rejected the government’s explanation for removing fuel subsidies, calling the long-running fuel subsidy narrative nothing more than “accounting magic”.

He insisted that if Nigeria calculates petrol prices using actual local production costs rather than international market benchmarks, pump prices would drop immediately without hurting government revenue.

According to him, N605 per litre is a realistic starting price for petrol under proper management. He further suggested that with better currency stability and local refining, petrol prices could eventually drop to between N200 and N300 per litre over time.

The Math Behind the N605 Per Litre Fuel Price Proposal

Many political promises sound attractive until you ask for the math behind them. Olawepo-Hashim provided a step-by-step breakdown using figures attributed to the Nigerian National Petroleum Company Limited to show how he arrived at his N605 per litre target.

The Real Cost Breakdown Per Barrel of Oil

He explained that extracting a barrel of crude oil in Nigeria costs roughly $30. To ensure oil producers remain profitable, he added a $15 profit margin, bringing the price of raw crude to $45 per barrel.

From there, refining the crude into usable petrol adds about $5 per barrel. Transporting the refined fuel and paying for insurance adds another $7 per barrel. Adding all these figures together gives a total finished cost of $57 per barrel of petrol.

Converting Barrels into Litres and Naira

One standard barrel of crude oil yields approximately 159 litres of refined petroleum products. Dividing the total cost of $57 by 159 litres equals roughly $0.34 (or 34 cents) per litre.

Using an exchange rate of N1,400 to the US dollar, 34 cents translates to about N501 per litre for petrol. To create a cushion for national development, Olawepo-Hashim proposed adding an Energy Stabilisation Tax of roughly N104 per litre. That tax would build funds for clean energy and future infrastructure while leaving the final price at the pump at N605 per litre.

He emphasized that under his framework, no Nigerian would ever buy petrol above N610 per litre, and the government would still raise significant tax revenue from every litre sold.

What Does ‘Accounting Magic’ Mean in Petrol Pricing?

The core of Olawepo-Hashim’s argument centers on how Nigeria calculates fuel prices. He argued that the government has confused true production costs with what economists call “opportunity costs”.

Production Cost vs. International Opportunity Cost

When a country produces a commodity locally, the actual cost of making that product is its production cost. However, the Nigerian government prices crude oil supplied to domestic refineries using international market benchmarks.

For example, if it costs $30 to produce a barrel of oil in Nigeria, but that same barrel can be sold to buyers in Europe or Asia for $80, the government treats the $50 difference as a loss if the oil is sold locally at production cost. Olawepo-Hashim insists that this gap is not a real financial loss because the money was never spent out of pocket.

Calling that price difference a “subsidy loss” creates paper-based magic that makes citizens believe petrol is cheap only when the government pays for it. In reality, the product was simply produced locally and priced according to its true internal production costs.

Paying Twice for System Inefficiency

Olawepo-Hashim pointed out that everyday citizens are currently forced to pay twice for inefficiencies inside the oil industry.

First, high production costs, complex contracting, and over-invoicing inflate the cost of getting oil out of the ground. Second, when those inflated costs are matched against high global market rates, consumers face skyrocketing prices at filling stations.

He argued that citizens should not bear the financial burden of industry waste and then be told that high prices are the inevitable outcome of subsidy removal.

Lessons from Other Oil-Producing Nations

To back up his position, Olawepo-Hashim cited oil-rich countries like Saudi Arabia and Kuwait. These nations do not force their domestic markets to pay international spot prices for locally produced energy.

Instead, they treat energy as a strategic national resource that powers local factories, transports food cheaply, and keeps everyday living costs low. By protecting domestic fuel supplies from international market spikes, these countries maintain strong industrial bases and protect household purchasing power.

According to Olawepo-Hashim, Nigeria has plenty of crude oil beneath its soil, yet treats its domestic market as if it were an importing nation with zero natural resources. Changing that pricing mindset is the fastest way to lower prices at the pump without draining government funds.

Why Transparency and a Forensic Audit Are Needed Now

To clear up confusion around oil costs, Olawepo-Hashim called for an independent forensic audit of Nigeria’s entire oil sector.

Opening the Books to Public Scrutiny

He challenged government officials and the NNPCL to publish detailed data covering every step of the petroleum supply chain. The proposed audit would examine:

• Actual drilling and production costs across different oil fields.
• Procurement and contracting expenses inside the industry.
• Pipeline transport fees, storage costs, and insurance premiums.
• Refining charges and retail distribution margins.

He argued that if anyone disagrees with his N605 calculation, they should bring out their financial record books and let the public compare the figures. “Let the data speak,” he insisted, emphasizing that transparent numbers will show whether petrol is genuinely expensive to produce or simply overpriced by administration policies.

Can Petrol Really Drop to N200 Per Litre in the Long Term?

Beyond his immediate proposal of N605 per litre, Olawepo-Hashim outlined a medium-term vision where petrol could sell for between N200 and N300 per litre. Achieving that price drop depends on fixing key economic factors over time.

Currency Stability and Exchange Rate Targets

The value of the naira plays a massive role in setting domestic fuel prices because many oil sector tools, spare parts, and refinery services are priced in US dollars.

Olawepo-Hashim stated that his broader economic plan aims to stabilize the naira at an exchange rate between N525 and N700 to the dollar. Strengthening the local currency automatically reduces input costs across the entire petroleum supply chain.

Boosting Domestic Refining Capacity

Importing refined petrol from foreign refineries adds heavy shipping fees, port handling charges, and international trader margins to every litre.

By expanding domestic refining capacity and supplying local crude directly to Nigerian refineries at production cost, the country can eliminate foreign exchange middlemen entirely. Combining local refining with a stronger naira would make N200 to N300 per litre achievable without returning to old subsidy programs.

How High Petrol Prices Impact Daily Life in Nigeria

The debate over fuel pricing is far more than a political discussion. Fuel costs directly affect the daily living expenses of every household in the country.

Transportation and Food Inflation

When filling stations raise petrol prices, commercial drivers raise passenger fares immediately. Higher transport costs mean farmers pay more to send produce to city markets, pushing up the price of staple foods like rice, beans, yam, and vegetables.

Because food and transport make up the largest part of most family budgets, high fuel prices cut deeply into household savings and reduce overall living standards.

Powering Small Businesses and Workplaces

Many small businesses across Nigeria rely on petrol generators to stay open due to unstable electricity supplies. Tailors, barbers, cold-room operators, logistics startups, and tech freelancers spend a huge percentage of their weekly income on generator fuel.

When energy costs swallow business profits, owners cannot hire new workers or expand operations. Lowering fuel prices to N605 per litre would instantly reduce operating expenses for millions of small enterprises, giving the entire economy room to grow.

Building Business Resilience in a Changing Economy

While political leaders debate national energy policies, individuals and business owners must find practical ways to adapt to economic shifts. Exploring digital income models and automated systems has become a popular strategy for professionals looking to diversify their earnings.

For example, learning about modern digital creation strategies, such as YouTube Automation, allows content creators to build online revenue streams that operate smoothly regardless of local fuel costs. Similarly, staying updated on developments in Technology and AI helps small businesses automate routine tasks, cut operational waste, and stay competitive in tough economic conditions.

Understanding these tools gives entrepreneurs stronger control over their financial futures, even when energy and transport costs fluctuate wildly.

Frequently Asked Questions (FAQs)

Who is Gbenga Olawepo-Hashim?

Gbenga Olawepo-Hashim is a Nigerian politician, business executive, and chieftain of the Accord Party. He was a presidential candidate in previous elections and has consistently advocated for energy security, local crude pricing reform, and economic restructuring.

Is N605 per litre realistic without bringing back fuel subsidies?

Yes, according to Olawepo-Hashim’s pricing model. He argues that by calculating fuel prices using actual local production costs ($30/barrel) plus refining, transport, and a government energy tax, petrol can sell for N605 per litre without requiring government subsidy payments.

Why does the government price domestic crude using international market rates?

The government uses international benchmarks because crude oil sold overseas earns foreign exchange in US dollars. Comparing local fuel prices to global market rates allows officials to show how much potential export revenue is given up when oil is sold domestically. Olawepo-Hashim calls this comparison an opportunity cost rather than an actual subsidy loss.

How does the naira exchange rate affect local petrol prices?

Even when petrol is refined locally, many equipment parts, chemicals, and industry services are billed in US dollars. A weaker naira raises the local currency cost of those dollar inputs, pushing up final pump prices. A stronger, stable naira lowers production expenses and keeps fuel prices down.

Would selling fuel at N605 per litre lower government revenue for public projects?

Olawepo-Hashim maintains that government revenue would not decline. Cheaper energy lowers transportation and manufacturing costs, boosts consumer spending, and helps small businesses grow. A growing economy expands the national tax base, generating steady revenue for public infrastructure through increased business activity.

Final Thoughts on the N605 Petrol Proposal

Gbenga Olawepo-Hashim’s proposal has reopened an important debate about how Nigeria manages its natural wealth. By questioning standard subsidy definitions and presenting a detailed production-cost model, he has challenged policymakers to rethink domestic fuel pricing from the ground up.

Whether fuel sells for N605 or higher in the coming months, one fact remains clear: energy costs sit at the very heart of Nigeria’s economic health. Clear data, transparent auditing, and smart economic planning will be essential as the country searches for a sustainable path forward.

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