The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has defended the Federal Government’s deregulation of the downstream petroleum sector, saying the average price of petrol in Nigeria remains lower than in the United States and several African countries despite the removal of subsidy.
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Lokpobiri spoke on Tuesday during an appearance on Channels Television’s Politics Today, amid renewed concerns over petrol prices and their impact on household purchasing power.
The minister said Nigerians were not alone in facing higher energy costs, arguing that crude oil and refined petroleum products are globally traded commodities whose prices are influenced by developments in the international market.
“Because of what is happening in the Middle East, it is expected that energy prices may not come down. We should also know that oil and gas is a global commodity, what is sold in New York is also what is sold here,” he said.
According to figures cited by Lokpobiri during the interview, the average price of petrol in Nigeria stood at about ₦1,430 per litre, compared with ₦1,633 in the United States, ₦1,959 in Cameroon and ₦2,070 in both Ghana and South Africa.
“In the US, the average, you know, liter 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,” he said. Those comparative figures were presented by the minister during the interview.
His remarks came as the Dangote Petroleum Refinery and other marketers began reducing depot prices following a decline in international crude oil prices.
Dangote Refinery reduced its petrol depot price from ₦1,350 to ₦1,325 per litre, representing a ₦25 reduction, while other marketers also lowered prices at depots in Lagos, Port Harcourt, Calabar and Warri. Petrol, however, was still selling for between about ₦1,370 and ₦1,450 per litre in some locations.
Recent reporting by Reuters similarly placed petrol at around ₦1,400 per litre in Lagos and Abuja, with higher prices reported in parts of northern Nigeria, against the backdrop of higher international energy prices.
Lokpobiri argued that Nigeria’s status as an oil-producing country and the operation of the Dangote Refinery did not automatically mean petrol would be cheaper than in every other country.
He cited the United States, describing it as the world’s largest oil and gas producer with significant refining capacity, while maintaining that its petrol prices remained higher than Nigeria’s based on the figures he presented.
“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 had created room for increased private-sector participation in Nigeria’s midstream and downstream petroleum industries.
According to him, continuing the previous arrangement in which the government imported petrol and sold it below market price would have undermined private refining investments.
“But for the policy of deregulation, Dangote Refinery wouldn’t have been the most attractive IPO in the continent. If government was continuously importing, as NNPC was doing, and selling at a lower price than the market price, Dangote wouldn’t have been able to survive,” Lokpobiri said.
He added that deregulation was intended to allow private businesses associated with the oil and gas sector to operate in a commercially sustainable environment.
The minister also said the Tinubu administration would not arbitrarily control petrol prices under the current deregulated market.
Asked whether the government had the power to reduce or increase the price of petrol, Lokpobiri replied: “No, we don’t,” adding that the sector was “completely deregulated in line with global best standards all over the world.”
According to him, even significantly increasing Nigeria’s crude production would not insulate the country completely from international petroleum pricing because crude oil and refined products are traded globally.
“As far as I am concerned, whether we are producing 3 million barrels today, the price will not change because it is a global commodity,” he said.
Lokpobiri also defended President Bola Tinubu’s removal of petrol subsidy, saying the decision was necessary to prevent worsening fiscal pressure and create resources for other levels of government.
“This decision was made at the right time and if it wasn’t made then, Nigeria would have been like Venezuela,” he said.
He said savings arising from the removal of subsidy had contributed to larger allocations being shared among the federal, state and local governments through the Federation Account Allocation Committee.
“These days we get 2.1 trillion 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,” Lokpobiri said. The statement represents the minister’s assessment of the impact of subsidy removal.
The minister acknowledged the pressure high petrol prices were placing on Nigerians but maintained that consumers in the United States and Europe were also experiencing the impact of higher energy costs.
“The difficulties Nigerians are facing is not peculiar to Nigerians, if you go to America, the purchasing capacities of Americans are also affected, if you go to Europe the purchasing capacities of Europeans are also affected. The energy cost is a global thing and its effect is a global thing,” he said.
Lokpobiri maintained that the government would not reverse deregulation merely to administratively lower petrol prices, arguing that doing so would amount to returning to subsidy.
He also cited the Dangote Refinery’s supply of aviation fuel and developments in Nigeria’s foreign reserves as evidence of improvements linked to the oil and gas sector.
The minister further said the Central Bank of Nigeria had indicated that about 85 per cent of the country’s foreign reserves came from the oil and gas sector.
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