The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has emphasized that fluctuations in petrol prices are primarily driven by the international cost of crude oil. He stated that with the full deregulation of Nigeria’s downstream sector, the government no longer controls fuel prices, allowing market forces to determine petrol costs.
Lokpobiri made these remarks during the inaugural meeting of the Petroleum Industry Stakeholders Forum in Abuja on Thursday. He pointed out that the recent surge in the price of Brent crude, which crossed the $80 per barrel mark, has raised concerns over a potential increase in pump prices. However, at the meeting, marketers assured that the price hike would not be immediate, despite rising crude prices.
Lokpobiri explained that deregulation was intended to eliminate the issues associated with petrol subsidies, which had long been a source of public discontent. He noted that with the subsidy policy gone, the market is now able to set prices based on global oil trends. He further highlighted the importance of government involvement in ensuring quality control and the proper distribution of petrol, especially at retail stations, to avoid consumers being short-changed.
“The essence of deregulation is for the price to find its level. As oil prices go up, petrol prices will follow suit, and as oil prices decrease, so will petrol prices. This removes the volatility and controversies associated with subsidies,” Lokpobiri stated.
Despite concerns, he emphasized that quality control remains a priority, with the government focusing on ensuring adequate supply and proper dispensing of fuel at stations. He also noted that petrol prices at different stations during the holiday season ranged from N999 to N1,020, reflecting the market’s ability to set competitive prices.
Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), attributed the recent decrease in petrol prices to a partnership with the Dangote refinery. He explained that independent marketers, in collaboration with the Dangote refinery and MRS filling stations, are able to offer a lower price, selling at N935 per litre nationwide.
Huub Stockman, Chairman of the Major Energy Marketers Association of Nigeria (MEMAN), echoed similar sentiments, explaining that while crude oil prices impact petrol prices, they do not always result in immediate price hikes. He cautioned that predicting the exact timing or magnitude of price changes is difficult, as other market factors also play a role in determining pump prices.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), also provided an update on the country’s oil production, noting that Nigeria has seen growth in both reserves and production. He highlighted that the number of active oil rigs has increased by 79 percent from 8 in 2021 to 38, and that efforts to curb oil theft and deferment have resulted in a 40 percent reduction in losses.
The discussions at the forum shed light on the complexities of Nigeria’s oil and gas market, with experts stressing the importance of deregulation, market competition, and collaboration among stakeholders in driving the sector forward.
