The Federal Government has defended Nigeria’s current petrol pricing structure, saying the cost of Premium Motor Spirit (PMS) in the country remains below prices in the United States and several other African nations.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, made the assertion as Nigerians continue to contend with rising fuel costs and increased pressure on household and transportation expenses.
His comments came amid renewed concerns over recent adjustments in petrol prices by marketers and the Nigerian National Petroleum Company Limited (NNPCL).
According to the minister, Nigeria cannot determine the price of petrol entirely independently because both crude oil and refined petroleum products are traded in an international market.
Minister explains Nigeria’s fuel pricing
Lokpobiri argued that Nigeria’s status as a major crude oil producer does not automatically mean petrol must be sold at a significantly lower price domestically.
He explained that crude oil is a globally traded commodity, meaning its international value influences the cost of refined products even in oil-producing countries.
The minister also pointed to the country’s growing domestic refining capacity, saying Nigerians are already benefiting from local production.
He maintained that this benefit is reflected in the fact that the country’s petrol price remains lower than what consumers pay in some other markets, including the United States.
Petrol prices have recently increased
The minister’s comments come at a time when petrol prices have been climbing in different parts of Nigeria.
Recent reports indicate that prices have reached around N1,400 per litre in Lagos and Abuja, while some locations in northern Nigeria have recorded prices of up to N1,500 per litre.
The increases have raised concerns among motorists, transport operators and households because higher fuel costs can feed into transportation expenses and the prices of goods and services.
The Nigeria Labour Congress has also called for government intervention, warning that continued increases could place additional pressure on workers and consumers.
Why global oil prices matter
Lokpobiri said the government could not simply instruct petrol sellers to reduce the commodity to a particular price such as N700, N800 or N1,000 per litre without considering the underlying market conditions.
He stressed that crude oil and refined products operate within a global market.
The minister’s position is that increasing Nigeria’s crude production alone would not necessarily result in an equivalent reduction in the pump price because the value of crude is influenced by international benchmarks.
The Federal Government has separately said that plans to increase domestic crude production will support the wider oil sector, but higher output by itself may not automatically translate into cheaper petrol.
Dangote refinery adds new dimension
Nigeria’s expanding refining industry has also changed the country’s petroleum market.
The Dangote Petroleum Refinery, with a stated capacity of 700,000 barrels per day, has become a major source of refined petroleum products for the domestic market.
However, the refinery still operates within international crude market conditions. The price of crude used as feedstock remains an important factor in determining the economics of refining and selling petrol.
Recent reporting by Reuters noted that even with the Dangote refinery operating at full capacity, higher international oil prices have continued to affect petrol prices in Nigeria.
Petrol cheaper than some neighbouring countries
The argument that Nigerian petrol remains relatively inexpensive compared with some other markets has also been made by business leaders.
Dangote Group President Aliko Dangote recently said petrol in neighbouring countries can cost 30 to 50 per cent more than in Nigeria.
He argued that the price difference provides an incentive for petrol smuggling across Nigeria’s borders, because traders can potentially make substantial returns by selling the product in countries where prices are higher.
Rising prices remain a concern
Despite the government’s explanation of the international factors affecting petrol prices, the issue remains a significant economic concern for Nigerians.
Higher fuel costs can increase the expense of running private vehicles, commercial transport and businesses that depend on petrol-powered generators.
The recent increases have therefore intensified calls from labour groups and other stakeholders for measures that could reduce the impact of expensive energy on households and businesses.
For the Federal Government, however, the current pricing environment reflects the realities of a globally traded commodity market. Lokpobiri’s latest comments suggest that significantly lower petrol prices cannot be achieved simply by administrative intervention without addressing the broader costs associated with crude oil, refining and distribution.
