“We Are Concerned”: FG Speaks on Factors Determining Petrol Price in Nigeria
- The Minister of Petroleum Resources (Oil), Senator Heineken Lokpobiri, pledged to continue working with oil and gas firms
- He did, however, emphasise that market forces would still determine the price of fuel in a deregulated market
- According to the minister, the goal of the discussion was to promote agreement to specify what is best for the sector
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
Senator Heineken Lokpobiri, the Minister of Petroleum Resources (Oil), has promised continued cooperation with oil and gas companies.
Source: UGC
However, he underlined that market forces would still determine the fuel price in a deregulated market.
The minister gave a speech during the Petroleum Industry Stakeholders Forum Meeting in Abuja, which gathered important participants from the Federal Government as well as other private companies, The Nation reported.
The stakeholders at the meeting praised the federal government for fostering an atmosphere conducive to success.
The meeting was intended to foster consensus to articulate what is best for the industry, the minister stated.
Lokpobiri said:
”The whole essence of the meeting was to bring the entire leadership of the oil industry together so that we will be able to build consensus around saying things that we think will be better for the industry.”
Price fluctuation normal
The minister stated that price fluctuations are normal in a deregulated market and that the price of crude oil influences global product prices.
The minister said,
“Nobody in a deregulated market can tell you that, okay, prices will come down or will not come down. It is dictated by the international crude oil price. And Nigeria can’t be an exception at all.”
According to the minister, the fundamental goal of deregulation is to allow gasoline prices to fluctuate in accordance with market forces.
He added:
“The whole essence of deregulation is for price to find its level.”
In Bayelsa State, the minister recalled that during the previous Yuletide, prices plummeted to as low as N1,020 per litre, N999 per litre, and so on.
According to him, the government's goal under a deregulated system is to guarantee product availability, quality control, and the appropriate amount is dispensed.
He said,
“What we are concerned about, and I have always had that discussion with you, with the authority, the Chief Executive of NMDPRA, that government is more interested in is quality control.
“What government is more interested in is availability. What government is particularly interested in is disposition of the right quantity. If I buy 10 liters of fuel, let it be that we are not surchanged by the pump fuel price. “
According to Lokpobiri, the competition resulting from the deregulated market has eliminated lines in recent weeks.
Huub Stockman, the head of the Major Energy Marketers Association of Nigeria (MEMAN), stated that an increase in the price of crude oil does not always translate into an increase in the price of gasoline.
Although he acknowledged that crude oil plays a significant role in the pricing pattern, he pointed out that other market factors also affect PMS costs.
He added that it was too soon to say that rising crude oil prices would lead to higher gas prices because the future is unpredictable.
“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.
Fuel prices at various filling stations emerge
Legit.ng earlier reported that the average price for Premium Motor Spirit (PMS), popularly known as petrol, ranges between N900 and N1,070 per litre at various filling stations nationwide.
There are now strong indications that the prices will not remain that way for a very long time amid a rise in global oil prices.
In July 2023, the federal government boldly decided to fully deregulate the downstream sector.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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