The Federal Government has ruled out a return to petrol subsidy, with Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, insisting that deregulation remains central to attracting private investment into Nigeria’s oil and gas industry.
Speaking on Channels Television on Tuesday, Lokpobiri said the government could not arbitrarily determine the pump price of petrol under the deregulated system, as refined petroleum products are influenced by international crude oil prices and other market forces.
The minister compared petrol prices in Nigeria with those in the United States and some African countries, saying the average Nigerian price of about N1,430 per litre was below the figures he cited for the US, Cameroon, Ghana and South Africa. He put the corresponding prices at about N1,633, N1,959, N2,070 and N2,070 respectively.
His comments came as petrol prices showed signs of easing at the wholesale level. According to TVC News, Dangote Petroleum Refinery reduced its depot price from N1,350 to N1,325 per litre, while other marketers also announced downward adjustments in Lagos, Port Harcourt, Calabar and Warri following a decline in international crude oil prices. Pump prices, however, remained higher in some locations.
Lokpobiri argued that the operation of a major local refinery does not automatically guarantee cheaper petrol, noting that crude oil remains an internationally traded commodity. He cited the United States, which he said has high crude production and substantial refining capacity but still records petrol prices above Nigeria’s average.
The minister said the deregulation policy had also encouraged private investment in the petroleum sector, using the Dangote Refinery as an example. He argued that continued government importation and the sale of petrol below market value would have made it difficult for private refineries to compete.
Lokpobiri also defended the removal of subsidy, saying the savings had increased funds available for distribution to the federal, state and local governments through the Federation Account Allocation Committee. He maintained that the government would not reverse deregulation, while citing increased domestic refining activity and the oil sector’s contribution to foreign-exchange earnings as some of the developments recorded under the policy.
