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The Federal Government has challenged petroleum marketers over the slow reduction in the pump price of Premium Motor Spirit (PMS), despite the significant decline in global crude oil prices, insisting that Nigerians should benefit from lower replacement costs in a deregulated market.
Speaking after a stakeholders’ meeting on cost-reflective petrol pricing in Abuja on Monday, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said the continued gap between falling international crude prices and domestic petrol prices was a major concern to government.
Lokpobiri noted that Brent crude prices have fallen sharply from highs recorded during the Middle East tensions, yet the corresponding reduction in petrol prices has been relatively modest.
“When Brent crude was above $118 per barrel, petrol prices increased rapidly. Now that crude prices have dropped significantly, why have pump prices not reduced correspondingly? That is our concern,” he said.
The minister stressed that while PMS pricing is influenced by several market variables, marketers should not continue to rely on profits from old inventories purchased at higher prices to justify current pump prices.
“As inventories are replenished at lower costs, the benefits must be transmitted to consumers promptly and transparently. That is the essence of a competitive and efficiently functioning deregulated market,” he added.
Lokpobiri said the Federal Government had asked downstream operators to develop practical measures that would ensure Nigerians benefit from lower fuel prices, warning that prolonged high energy costs could fuel inflation and erode recent economic gains. He also called for the speedy operationalisation of the National Strategic Stock to strengthen energy security and cushion future price shocks.
The meeting, convened at the headquarters of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), brought together key stakeholders including representatives of the Dangote Petroleum Refinery, the Federal Competition and Consumer Protection Commission (FCCPC), the Independent Petroleum Marketers Association of Nigeria (IPMAN), the Major Energy Marketers Association of Nigeria (MEMAN), depot owners, transport operators and other industry players.
Earlier, the Authority Chief Executive of the NMDPRA, Rabiu Umar, said the engagement was designed to bridge the disconnect between declining global crude oil prices and domestic petrol prices.
He noted that a similar engagement with operators in the domestic gas sector recently contributed to lower cooking gas prices, expressing optimism that collaborative discussions with marketers would deliver similar results in the PMS market. According to him, deregulation should promote efficiency, transparency and consumer welfare rather than excessive pricing.
Meanwhile, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, urged the Federal Government to restore importation rights to independent marketers while continuing to support local refining, particularly the Dangote Petroleum Refinery.
Maigandi disclosed that independent marketers have already reduced petrol prices by about N125 per litre nationwide and projected that pump prices could fall below N800 per litre if marketers are allowed to buy directly from the Dangote refinery and import products when necessary. He said increased competition would ultimately deliver lower prices for consumers.
The renewed push for lower petrol prices comes amid increasing competition in Nigeria’s deregulated downstream petroleum sector following the commencement of large-scale production at the Dangote Refinery and improving global crude oil market conditions.
