The Federal Government has cautioned petroleum marketers against justifying high petrol prices based on old, higher cost fuel stocks, insisting that reduced replacement costs in the current market should be reflected in pump prices for consumers.
It expressed concern over the widening gap between declining global crude oil prices and the relatively unchanged domestic petrol prices, warning that Nigerians should benefit from cheaper import and replacement costs in a deregulated downstream market.
The issue was raised during a stakeholders’ meeting on cost reflective pricing of Premium Motor Spirit (PMS) held on Monday at the headquarters of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja.
The meeting brought together major industry players, including representatives of the Dangote Petroleum Refinery, regulatory agencies, and key associations across the downstream petroleum value chain such as PETROAN, IPMAN, MEMAN, DAPPMAN, and NARTO.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said marketers should not continue charging high prices based on earlier expensive inventories when global crude prices have since dropped.
He explained that while factors such as exchange rates, logistics, and distribution costs affect pricing, marketers must separate legitimate costs from windfall gains linked to older stock purchases.
According to him, as new supplies are bought at lower prices, those savings should quickly translate into reduced ex-depot and retail fuel prices in line with a properly functioning deregulated market.
Lokpobiri stressed that deregulation is intended to improve efficiency and competition, not to allow excessive pricing or unfair profit taking at the expense of consumers.
He also warned that maintaining artificially high fuel prices could intensify inflation and slow down recent economic improvements.
The minister noted that although global crude oil prices have fluctuated significantly from about $61 per barrel in January to over $118 in April before falling back to around $71 domestic petrol prices have not adjusted downward at a similar pace.
He pointed out that while petrol prices have dropped from about N1,596 per litre in May to around N1,296 currently, the reduction does not fully reflect the decline in global market conditions.
Lokpobiri added that energy costs affect nearly every sector of the economy, including transport, food, and manufacturing, and therefore have a direct impact on inflation.
He further reiterated the government’s commitment to protecting consumers in the post-subsidy era and ensuring that deregulation delivers value rather than price manipulation.
The minister directed the NMDPRA to strengthen market monitoring and enforce transparency so that price reductions at the supply level are properly passed on to consumers.
He also called for the full operationalisation of the National Strategic Stock to improve energy security and help stabilize future fuel prices.
NMDPRA Chief Executive, Rabiu Umar, said the meeting was convened to address public concerns over petrol pricing and to ensure that Nigerians benefit from falling global crude prices.
He noted that similar collaboration in the gas sector had already led to a reduction in LPG prices and expressed hope that the same approach would yield results in the petrol market.
Umar acknowledged that while crude prices have declined recently, this has not yet been fully reflected in retail fuel prices.
He emphasized that deregulation should promote efficiency and fairness, not market distortion, and called for a pricing system that balances profitability for operators with protection for consumers.
