The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said the average price of petrol in Nigeria remains lower than in the United States, Ghana, Cameroon and South Africa despite the removal of subsidy.
Lokpobiri stated this on Channels Television’s Politics Today on Tuesday while defending the Federal Government’s deregulation of the downstream petroleum sector amid concerns over high petrol prices.
According to him, petrol currently sells for an average of about N1,430 per litre in Nigeria, compared with approximately N1,633 in the United States, N1,959 in Cameroon, and N2,070 in both Ghana and South Africa.
“In the US, the average, you know, litre of fuel is N1,633. In Nigeria, it’s on the average of N1,430. If you go to Cameroon, it’s N1,959. If you go to Ghana, it’s N2,070. If you go to South Africa, it’s N2,070. So Nigeria’s average cost of fuel per litre is still lower than,” he said.
His comments came as the Dangote Petroleum Refinery and other petroleum marketers reduced their depot prices following a decline in international crude oil prices.
The Dangote Refinery had reduced its petrol depot price from N1,350 to N1,325 per litre, while other marketers also announced price reductions in Lagos, Port Harcourt, Calabar and Warri.
Despite the reductions, petrol was still selling for between N1,370 and N1,450 per litre in some locations.
Lokpobiri said Nigeria’s status as an oil-producing country and the presence of the Dangote Refinery did not automatically guarantee lower petrol prices, stressing that petroleum products are traded in a deregulated market.
He said the deregulation policy had encouraged private investment in the midstream and downstream sectors, arguing that the Dangote Refinery would have struggled to compete if the Federal Government had continued importing petrol and selling it below the prevailing market price.
“As at today, the records available show that USA is the highest producer of oil and gas in the world. The United States is the highest producer of oil and gas in the entire world. They also have the highest refining capacity, but the fuel price per litre is higher than that of Nigeria.
“So despite the fact that Dangote Refinery is here, that doesn’t mean that the fuel price will be lower because Dangote Refinery is available. But what is important is that the regulation has also created a new economy,” he said.
The minister said deregulation was designed to create opportunities for private-sector businesses to invest and operate across the oil and gas value chain.
Lokpobiri also defended the removal of petrol subsidy, saying the savings were being distributed to the three tiers of government through the Federation Account Allocation Committee.
“These days we get N2.1tn being shared. This is the first time it is happening. You’ll recall that before this government came, about 27 states had no capacity to pay even salaries. Today, states are doing gigantic projects. It’s because of the savings that we made from this subsidy,” he said.
He acknowledged concerns over the impact of high energy prices on consumers but maintained that the situation was not peculiar to Nigeria, noting that energy prices were influenced by developments in the global oil market.
“Oil and gas is a global commodity. What is sold in New York is what is also sold here. So, no matter what you may think, America, or Saudi Arabia, or anywhere in the world, energy prices will always be the same,” Lokpobiri said.
The minister said the Federal Government would not reverse the deregulation policy, arguing that maintaining the policy was necessary to attract investment into the sector.
He also cited the Dangote Refinery’s supply of aviation fuel and developments in Nigeria’s foreign reserves as some of the gains associated with the reforms in the oil and gas sector.
Lokpobiri further said the Central Bank of Nigeria had recently stated that 85 per cent of the country’s foreign reserves came from the oil and gas sector.
