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Lokpobiri Demands Lower Petrol Prices, Summons Oil Industry Over Pricing Disconnect
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, on Monday convened an emergency meeting of Nigeria’s key oil refiner, petroleum marketers, regulators and competition authorities over the persistent high price of petrol, insisting that the recent moderation in international crude oil prices must be reflected in lower pump prices for Nigerians.
The stakeholders’ meeting on ‘Cost-reflective Pricing of PMS’ held in Abuja was attended by officials of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Competition and Consumer Protection Commission (FCCPC), the Dangote Refinery and the Independent Petroleum Marketers Association of Nigeria (IPMAN).
Others included: The Major Energy Marketers Association of Nigeria (MEMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) and the Nigerian Association of Road Transport Owners (NARTO).
Despite the recent sustained decline in international crude oil prices, retail petrol prices in Nigeria have remained relatively sticky, triggering concerns among consumers and policymakers over the pace of price adjustments in the fully deregulated downstream sector.
While crude prices have retreated from peaks above $120 to lower levels of around $70, industry operators argue that the pump price of petrol is influenced by a combination of factors beyond crude oil, including exchange rate volatility, freight and shipping costs, financing expenses, storage and distribution charges, and the cost of maintaining adequate inventories.
The slow response of domestic petrol prices has also renewed calls for greater transparency in the pricing templates of refiners and marketers, particularly as competition in the deregulated market deepens.
But at the Abuja event, the minister warned that deregulation was never intended to permit excessive pricing or market distortions, explaining that all the issues that have kept prices high should be immediately addressed.
Lokpobiri stressed that while the government remained committed to a deregulated downstream market, operators had a responsibility to ensure that lower replacement costs were transmitted to consumers promptly and transparently.
According to him, Brent crude traded at between $61 and $65 per barrel in January before surging to over $118 per barrel in April amid heightened geopolitical tensions in the Middle East, but has since moderated to around $71 per barrel as tensions eased.
He noted that although the initial increase in crude prices understandably pushed petrol prices higher, the subsequent decline in crude prices had not resulted in a corresponding reduction in domestic pump prices.
“Ordinarily, such movements in crude oil prices should be reflected in the pricing of refined petroleum products. While the initial increase in crude prices understandably exerted upward pressure on PMS prices, the subsequent moderation in crude oil prices has not translated into a commensurate reduction in pump prices across the domestic market with PMS peaking at N1,596/litre in May to N1,296/litre as at today. This disconnect has understandably raised concerns,” the minister said.
Lokpobiri acknowledged that several factors beyond crude oil prices influence PMS pricing, but maintained that marketers should not continue to reap windfall gains from inventories purchased at higher prices after replacement costs had declined.
“I am aware that PMS pricing is influenced by several factors beyond crude oil prices, but it is equally important to distinguish between genuine replacement cost and windfall gains arising from inventory management. Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined.
“As inventories are replenished at lower costs, the benefits of those lower costs should be transmitted to consumers in a timely and transparent manner. That is the essence of a competitive and efficiently functioning market,” he stated.
The minister argued that sustaining high energy prices beyond what prevailing market fundamentals justify would continue to fuel inflation and erode the gains already achieved in stabilising the economy.
Lokpobiri reiterated that the administration of President Bola Tinubu remained committed to protecting consumers even under a deregulated market, stressing that deregulation was designed to promote competition, efficiency and investment rather than encourage exploitative pricing.
“The federal government remains unwavering in its commitment to protect public interest post deregulation. Deregulation was never intended to create opportunities for excessive pricing or market distortions but rather promote efficiency, deepen competition and ultimately deliver value to Nigerians,” he said.
Besides, he directed the NMDPRA to strengthen market surveillance and enforce pricing transparency across the downstream value chain to ensure that reductions in costs were reflected in ex-depot and retail prices.
The minister also urged the regulator to fast-track the operationalisation of the National Strategic Stock (NSS), saying the initiative would improve energy security, reduce supply disruptions and moderate price volatility.
In his opening remarks, the Authority Chief Executive of the NMDPRA, Rabiu Umar, said the meeting was convened at the directive of the minister to address the growing disconnect between declining international crude oil prices and retail petrol prices in Nigeria.
He insisted that although the government remained committed to deregulation, it would not tolerate practices that undermine fair pricing.
“Our domestic retail market has not yet harmoniously adjusted to these downward shifts. As a responsible regulatory authority, it is our duty to step in alongside you, our valued partners, to interrogate the market forces, understand the operational bottlenecks, and directly address this disconnect between falling replacement costs and sustained retail prices,” Umar said.
He added that Tinubu has laid a resilient foundation for a deregulated, competitive, and investment-driven market. “But let me be clear: deregulation is not a license for market distortion or unfair consumer pricing. It is intended to drive efficiency, maximise value, and protect the public interest.
“Sustainable profitability for marketers and consumer welfare are not mutually exclusive. We need to build a transparent ecosystem where the benefits of market improvements are passed down to the Nigerian consumer in a timely and fair manner,” he stated.
Umar emphasised that the objective of the meeting was not to impose prices on operators but to jointly identify solutions that would ensure both commercial viability and consumer protection.
“Our objective today is not to dictate, but to collaborate. We want to engage in an open, transparent, and solution-oriented dialogue. We want to hear your challenges, discuss market surveillance, look into inventory management, and align on how we can collectively accelerate key mechanisms like the National Strategic Stock (NSS) to protect our national energy security.
“I urge everyone present to engage constructively. Let us work together to find a balanced path forward that keeps your businesses viable while ensuring that the public is fairly protected,” Umar reiterated.
Also speaking, the President of IPMAN, Abubakar Maigandi, said independent marketers were prepared to reduce petrol prices significantly, including to below N800 per litre, provided they could obtain products directly from refineries at competitive prices.
He explained that one of the association’s major demands was for members to buy products directly from the Dangote Refinery and, where necessary, be allowed to import petroleum products independently.
“Our major concern is that if products are to be distributed, let IPMAN buy directly from Dangote Refinery. If there is a need for importation, let IPMAN also import by itself. But what we are trying to encourage is our local refinery. Let the government allow the local refinery to function properly and assist those who intend to establish refineries too,” he said.
Responding to concerns that petrol prices do not decline as rapidly as they rise, Maigandi argued that marketers had been reducing prices progressively, just as increases were implemented gradually.
He disclosed that independent marketers had already reduced petrol prices by about N125 per litre nationwide and pledged that further reductions would follow.
“Presently, we have reduced N125 per litre nationwide. At any time when there is a reduction in price, we are ready to reduce the price to even below N800, not even N900. It depends on the way we buy the product from the private depot owners and Dangote Refinery.
“I thank God that Dangote Refinery has accepted independent petroleum marketers to start purchasing their products directly. So, it’s a plus. Very soon, Nigerians will see the change in terms of price,” Maigandi stated.
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