The Minister of State for Petroleum Resources, Heineken Lokpobiri, has explained that the price of crude oil on the international market plays a significant role in determining the prices we pay at the gas station for petrol. This means that when crude oil prices go up or down globally, it affects how much we pay for petrol at the pump.
He emphasized that the government has now completely stepped back from controlling petrol prices, meaning that the market itself is now responsible for setting these prices. Lokpobiri shared these insights during the first meeting of the Petroleum Industry Stakeholders Forum, which took place on Thursday in Abuja, Nigeria.
Recently, there have been worries that petrol prices might rise again since the price of Brent crude oil, which is a major global standard for oil pricing, has exceeded $80 per barrel. Just this past Monday, private storage facilities raised the price they charge for loading petrol and other refined oil products to 950 Naira per litre.
Despite these developments, marketers at the meeting reassured everyone that a rise in petrol prices will not happen immediately. After the meeting, Lokpobiri spoke to reporters and pointed out that the removal of price controls has eliminated many of the problems that were associated with the previous petrol subsidy system, which often led to corruption and mismanagement.
He explained that the government is now more focused on ensuring that petrol is of good quality and that consumers get the correct amount they pay for. For example, if you buy 10 litres of petrol, you should actually receive 10 litres, without being cheated by the filling station. Lokpobiri also mentioned that because there is now competition among petrol sellers, consumers have more choices, which is why we no longer see long lines at petrol stations.
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In related news, Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria, attributed the recent drop in petrol prices to a partnership with the Dangote refinery. He explained that since late last year, members of his association have been sourcing petrol from the Dangote refinery, which has allowed them to sell petrol at a lower price than other marketers. As a result, they have a consistent price across the country, currently set at 935 Naira per litre.
Huub Stockman, the Chairman of the Major Energy Marketers Association of Nigeria, also spoke at the meeting. He noted that while the price of petrol at the pump is influenced by crude oil prices, changes do not happen immediately. He explained that just because crude oil prices rise, it doesn’t mean that petrol prices will increase right away. Stockman, who is also the Managing Director of NNPC Retail, mentioned that predicting these price changes is complicated and not always straightforward.
He acknowledged that crude oil is a key factor in pricing petrol, but he also pointed out that other market factors come into play.
Earlier in the meeting, Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, shared positive news about Nigeria’s oil production. He reported that the number of active oil rigs in the country has increased by 79% since 2021, going from 8 to 38 rigs. Additionally, he mentioned that Nigeria has seen a growth in its oil and gas reserves and an increase in oil production by 26% over the past year. Komolafe also noted that efforts to work with security agencies have significantly reduced oil theft and delays, which is encouraging for the industry’s future.
