Petrol Cheaper in Nigeria Than US, Some African Countries — Minister

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said the average price of petrol in Nigeria remains lower than in the United States and several African countries despite the removal of fuel subsidy and the deregulation of the downstream petroleum sector.

Lokpobiri made the assertion during an appearance on Channels Television’s Politics Today, where he defended the Federal Government’s deregulation policy amid concerns over the impact of high petrol prices on Nigerian households and businesses.

His comments came as the Dangote Petroleum Refinery and other marketers reduced their depot prices following a decline in international crude oil prices.

Dangote Refinery recently reduced its petrol depot price from N1,350 to N1,325 per litre, while other marketers also adjusted prices in Lagos, Port Harcourt, Calabar and Warri.

Despite the reductions, petrol was still selling for between N1,370 and N1,450 per litre in some locations.

Minister Compares Nigeria’s Petrol Prices With Other Markets

Lokpobiri said Nigeria’s average petrol price stood at about N1,430 per litre, which he compared with higher figures for the United States, Cameroon, Ghana and South Africa.

According to figures cited by the minister, petrol averaged the naira equivalent of N1,633 per litre in the United States and N1,959 in Cameroon, while Ghana and South Africa were placed at about N2,070 per litre.

The minister argued that Nigeria’s position as an oil-producing country does not automatically guarantee significantly cheaper petrol.

He pointed to the United States as an example, saying the country combines significant oil and gas production with extensive refining capacity but still records petrol prices that, based on the figures he cited, are higher than Nigeria’s.

Lokpobiri also said the presence of the Dangote Refinery should not be expected to automatically translate into lower fuel prices because petroleum products operate within a market influenced by global crude prices and other cost factors.

Deregulation Creating Investment Opportunities

The minister defended the government’s decision to deregulate the downstream petroleum sector, arguing that the policy has created opportunities for increased private-sector participation and investment.

He said continued government importation of petrol and sales below market prices would have made it difficult for private refineries to compete commercially.

“But for the policy of deregulation, Dangote Refinery wouldn’t have been the most attractive IPO in the continent,” Lokpobiri said.

“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.”

According to the minister, deregulation is intended to create a market in which private businesses can invest across Nigeria’s midstream and downstream petroleum sectors.

Minister Defends Subsidy Removal

Lokpobiri also defended the removal of petrol subsidy, saying savings from the policy had increased funds available for distribution among the federal, state and local governments through the Federation Account Allocation Committee.

He said monthly allocations had risen to about N2.1tn, arguing that higher revenues had strengthened the ability of state governments to fund salaries and infrastructure projects.

The minister attributed part of the increase in government revenues to savings generated from ending petrol subsidy payments.

Lokpobiri further argued that elevated energy costs were not unique to Nigeria, noting that consumers in other major economies were also exposed to movements in global energy prices.

“Oil and gas is a global commodity,” he said, maintaining that international market conditions influence energy prices across countries.

Government Rules Out Reversal of Deregulation

Lokpobiri said the Federal Government would maintain its deregulation policy despite concerns over the financial pressure higher fuel prices have placed on consumers.

According to him, reversing the policy could undermine private investment in the petroleum industry and weaken efforts to develop a more commercially sustainable downstream sector.

He also pointed to the Dangote Refinery’s production of aviation fuel and the contribution of the oil and gas industry to Nigeria’s foreign reserves as indicators of the sector’s economic importance.

The minister said the Central Bank of Nigeria had recently indicated that about 85 per cent of the country’s foreign reserves were derived from the oil and gas sector.

The government’s position comes as Nigerians continue to contend with elevated transportation and energy costs, while movements in crude oil prices and domestic refinery output increasingly influence pump prices under the deregulated market.