Key Points
- Independent petroleum marketers have projected that petrol prices could fall below ₦800 per litre if market conditions improve.
- The Federal Government of Nigeria has engaged downstream operators over the disconnect between falling global crude oil prices and domestic petrol prices.
- The Independent Petroleum Marketers Association of Nigeria (IPMAN) is seeking the restoration of import licences for independent marketers.
- The government says lower crude oil prices should be reflected more quickly in ex-depot and retail petrol prices.
- The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says deregulation should promote competition, not excessive pricing.
Main Story
Independent petroleum marketers have called on the Federal Government to restore importation rights for licensed operators, arguing that increased competition in the downstream petroleum sector could drive the pump price of Premium Motor Spirit (PMS), commonly known as petrol, below ₦800 per litre.
The call came as the Federal Government of Nigeria convened a high-level stakeholders’ meeting in Abuja to address concerns over the persistent gap between declining global crude oil prices and relatively high domestic petrol prices.
The meeting, hosted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), brought together key players in the downstream sector, including representatives of the Dangote Petroleum Refinery, the Independent Petroleum Marketers Association of Nigeria (IPMAN), the Major Energy Marketers Association of Nigeria (MEMAN), the Depot and Petroleum Products Retailers Association of Nigeria (DAPPMAN), the Nigerian Association of Road Transport Owners, and other industry stakeholders.
Speaking after the meeting, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the government remained concerned that current petrol prices had not reflected the significant decline in international crude oil prices.
He noted that while crude oil prices had surged above $118 per barrel during heightened geopolitical tensions in the Middle East, they have since moderated to about $71 per barrel, yet retail petrol prices have not fallen proportionately.
According to the minister, marketers have been asked to develop practical measures that would ensure Nigerians benefit from lower replacement costs in line with the principles of a deregulated market.
Before the closed-door meeting, Lokpobiri cautioned operators against using profits from inventories purchased at higher crude oil prices as justification for maintaining elevated pump prices after replacement costs had declined.
He stressed that deregulation was intended to encourage efficiency and competition rather than create opportunities for excessive pricing or market distortions.
Meanwhile, IPMAN National President, Abubakar Maigandi, urged the government to permit independent marketers to import petroleum products directly while continuing to support local refining.
He said allowing marketers to source products both from the Dangote Refinery and international suppliers would deepen competition and ultimately lower prices for consumers.
Maigandi disclosed that independent marketers had already reduced petrol prices by about ₦125 per litre nationwide and expressed confidence that prices could drop below ₦800 per litre if procurement costs continue to decline.
He also welcomed the Dangote Refinery’s decision to begin selling products directly to independent marketers, describing it as a positive development that would increase market competition and improve product availability.
Also speaking, the Chief Executive of the NMDPRA, Rabiu Umar, said the meeting was convened to ensure that improvements in global market conditions translate into lower prices for Nigerian consumers.
He cited the recent decline in liquefied petroleum gas (LPG) prices following similar stakeholder engagements as evidence that collaborative dialogue could deliver tangible results in the downstream sector.
The Issues
Although Nigeria has deregulated the petrol market and domestic refining capacity has improved with the commencement of operations at the Dangote Refinery, consumers continue to face relatively high fuel prices despite falling international crude oil prices.
Industry stakeholders argue that factors such as inventory replacement costs, exchange rate volatility and distribution expenses continue to influence pump prices. However, the government insists that reductions in crude oil prices should be transmitted more quickly to consumers to ease inflationary pressures and reduce the cost of living.
What’s Being Said
Heineken Lokpobiri
“Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined.”
Abubakar Maigandi
“At any time when there is a reduction in price, we are ready to reduce the price to even below ₦800 per litre.”
Rabiu Umar
“Deregulation is not a licence for market distortion or unfair consumer pricing. It is intended to drive efficiency, maximise value, and protect the public interest.”
What’s Next
The Federal Government said discussions with downstream operators will continue as marketers review possible measures to reduce petrol prices.
Industry watchers expect the outcome of the engagements to shape competition in the downstream sector and determine whether declining global crude oil prices will eventually translate into lower pump prices for Nigerian consumers.
Bottom Line
The renewed push for independent fuel importation and the government’s engagement with downstream operators signal growing pressure to make petrol pricing more responsive to global market conditions. Whether pump prices fall below ₦800 per litre, however, will depend on crude oil prices, exchange rates, market competition and the speed at which lower replacement costs are passed on to consumers.
