The Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, has said the price of crude oil in the international market remains a major force in driving the fluctuations in the pump prices of petrol.
He said the downstream sector is now fully deregulated with the government no longer involved in setting prices.
The minister said these at the inaugural meeting of the Petroleum Industry Stakeholders Forum, held on Thursday in Abuja.
“Apples Bite Magazine” reports that there have been fresh concerns over a potential increase in the pump prices of petrol after the cost of Brent, the global benchmark for crude, crossed $80 per barrel.
On Monday, private depots increased the loading cost of petrol and other refined petroleum products to N950 per litre.
However, marketers at the meeting allayed fears over the imminent rise in the price of petrol, noting it won’t be immediate.
Lokpobiri, speaking to journalists after the meeting, pointed out that deregulation ended all malfeasance associated with the petrol subsidy policy.
According to him, the government is now more interested in quality control as petrol prices are not controlled or predicted by an individual but by market forces.
He said, “The whole essence of deregulation is for price to find its level. Before now you will agree with me that every day you are hearing negative news about petrol subsidies. Today, you journalists have no negative news about petrol subsidies because it is completely regulated, and the price will find its level.
“As oil price goes up, petrol price will go up, and as oil price comes down, the price will come up. During the Christmas season, I was in Bayelsa, and I tried to go around different filling stations. Some filling stations were selling N1,020, others were selling N999, while others were selling N1,015.
“What we are concerned about, and I’ve always had that discussion with you, with the Authority Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, is that the government is more interested in quality control. The government is more interested in availability, and what the government is particularly interested in is the dispensation of the right quantity.
“If you are buying 10 litres of PMS, let it be that you are not short-changed by the retail filling station. That is where we have issues. And once there is competition, people have a choice, and that’s why you don’t see any queues”.
However, the National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, attributed the current reduction in prices of petrol to the partnership reached with the Dangote refinery.
According to him, members of the association have begun loading petrol from the Dangote refinery alongside the MRS filling station from late last year, leading to a reduction in the retail price of petrol across the country.
He said, “We have been loading with the Dangote refinery as same with the MRS. We have an agreement between MRS, Dangote and independent marketers; that is why we sell at a lower price than other marketers because of the partnership with Dangote, and we have a uniform price everywhere in the country; we sell for N935 per litre.”
Also speaking, the Chairman of the Major Energy Marketers Association of Nigeria, Huub Stockman, explained that although petrol pump price is affected by crude oil costs, this may not be immediate.
He said the recent rise in crude oil price does not automatically mean an increase in petrol price.
Stockman, who is also the Managing Director, NNPC Retail noted, “I think that is always a bit of a crystal ball conversation if you know what I mean. Because crude and product prices don’t always directly relate.
“And it’s not always so that when the crude changes, immediately all other products that are derivatives from it change.
“So if I knew, I would probably not be standing here, but I would do something else. But I think normally there is a correlation. But I think it is too early to say when or what impact it would have.”
He, however, admitted that crude oil is a major component of the pricing template, noting that other market parameters also determine the cost of PMS.
Earlier in his address at the meeting, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe said the NUPRC was working hard in collaboration with stakeholders to increase Nigeria’s oil production, adding that the number of active oil rigs has increased by 79 per cent from 8 in 2021 to the current 38.
He said: “The upstream sector experienced growth in the national oil and gas reserves by 1.45 per cent and 0.206 per cent respectively in 2024 compared with 2023 and oil production rose by 26 per cent from April 2023 to November 2024.
“The active rig count increased from an average of 8 in 2021 to 38 as of today representing 79 per cent growth. Also, with effective collaboration with the security agencies, the theft and deferment has reduced drastically by more than 40 per cent in the last year. The import of this is that it is not all gloomy for the industry”.
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.
