FG, Dangote, marketers in talks to further slash fuel prices

The Federal Government, through the ministry of petroleum (oil) has begun engagement with the Dangote refinery, the Federal Competition and Consumer Protection Commission and other oil marketers in a bid to reduce the price of petrol across the country.

Speaking during the meeting in Abuja on Monday, Heineken Lokpobiri, minister of petroleum resources (oil), stated that while the initial increase in crude prices exerted upward pressure on petrol prices, the subsequent moderation in crude oil prices has not translated into a commensurate reduction in pump prices across the domestic market, as Nigerians still pay as high as N1,296/ltr as of today.

The minister, who noted that energy is a fundamental input across virtually every segment of the economy, said that when the cost of energy remains elevated beyond what prevailing market conditions justify, the results translate to inflation.

He explained that even though PMS pricing is influenced by several factors beyond crude oil prices, it is important to distinguish between genuine replacement cost and windfall gains arising from inventory management.

“While considerable progress has been made in moderating inflation from the highs experienced in 2024 at 34 percent, the latest figures show that inflation currently stands at 15.9 percent. Sustaining high energy costs where underlying market fundamentals have improved risks undermining these gains.

“Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined. As inventories are replenished at lower costs, the benefits of those lower costs should be transmitted to consumers in a timely and transparent manner. That is the essence of a competitive and efficiently functioning market,” he said.

The minister, noting the federal government’s commitment to protect public interest post-deregulation, said that deregulation was never intended to create opportunities for excessive pricing or market distortions but rather to promote efficiency, deepen competition, and ultimately deliver value to Nigerians.

In his remarks, Rabiu Umar, Authority Chief Executive (ACE) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stressed the need to ensure a cost-reflective and fair pricing of petroleum products, particularly petrol.

He noted that over the past six months, the country navigated considerable volatility in the international crude oil market with increases in prices due to heightened geopolitical tension and global conflicts.

“Recently, we have witnessed a welcoming easing of those tensions, which has driven a downward shift and moderation of global crude prices. However, our domestic retail market has not yet harmoniously adjusted to these downward shifts.

“As a responsible regulatory authority, it is our duty to step in alongside you, our valued partners, to interrogate the market forces, understand the operational bottlenecks, and directly address this disconnect between falling replacement costs and sustained retail prices,” he said.

Umar, speaking further, emphasised that deregulation is not licensed for market distortion or fair consumer pricing but a measure intended to drive efficiency, maximise value, and protect the public interest – sustainable profitability for marketers and consumer welfare are not mutually exclusive.

He stressed the need to build a transparent ecosystem where the benefits of market improvements are passed on to the Nigerian consumer in a timely and fair manner whilst protecting the sustainability of businesses.

“Our objective today is not to dictate but to collaborate. We want to engage in an open, transparent, and solution-oriented dialogue. We want to hear your challenges, discuss market surveillance, look into inventory management, and align on how we can collectively accelerate key mechanisms like the National Strategic Stock to protect our energy security.”

“Just two weeks ago, many of us gathered in a similar forum to discuss the domestic gas sector. The candid dialogue and the actionable wins we secured during that session are already bearing fruit.

“Notably, we have seen LPG prices coming down significantly across the market, and we look forward to seeing even more reduction within the next two weeks. It is exactly this kind of tangible success that inspired today’s gathering,” he added.