Minister Lokpobiri Warns Marketers Against Windfall Petrol Pricing
Nigeria’s downstream petroleum sector is bracing for another pricing showdown, as independent marketers renewed calls for the restoration of importation rights while projecting that pump prices of Premium Motor Spirit, popularly known as petrol, could fall below N800 per litre if market conditions align in their favour.
The projection emerged on Monday as the Federal Government convened a high-stakes meeting with major operators across the downstream petroleum sector, including representatives of the Dangote Petroleum Refinery, to interrogate what officials described as a troubling disconnect between falling global crude oil prices and the stubbornly high pump prices Nigerians continue to pay at the filling station.
The stakeholders’ session, focused squarely on cost-reflective pricing of PMS, was held at the headquarters of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja. It drew together an unusually broad coalition of industry voices: the Federal Competition and Consumer Protection Commission, the Independent Petroleum Marketers Association of Nigeria, the Major Energy Marketers Association of Nigeria, the Depot and Petroleum Products Retailers Association of Nigeria, the Depot and Petroleum Products Marketers Association of Nigeria, the Nigerian Association of Road Transport Owners, and several other major operators shaping the sector’s pricing dynamics.
Also present were chief executives and representatives of TotalEnergies, Eterna Plc, and Matrix Energy Group, alongside officials of the NMDPRA and delegates from the Dangote refinery, underscoring just how seriously the government is treating the pricing standoff.
Petrol prices have remained a persistent source of hardship for Nigerian households and businesses, with pump prices surging in the wake of a spike in global crude oil prices triggered by geopolitical tensions in the Middle East, particularly the standoff between Iran and the United States. Although those crude prices have since moderated following diplomatic efforts to ease the tensions, that relief has yet to be fully reflected in domestic petrol prices, a gap that prompted the Federal Government to convene Monday’s stakeholders’ meeting in pursuit of a fair, market-justified reduction.
At the centre of the marketers’ case was the National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, who used the forum to press the government to permit independent marketers to import petroleum products directly, arguing that greater competition in the supply chain would ultimately translate into lower prices for consumers. Maigandi also called for continued government support for local refineries, particularly the Dangote Petroleum Refinery, even as he insisted marketers must retain the option to import products whenever the need arises.
“Our major concern is that if products are to be distributed, let IPMAN buy products directly from the Dangote refinery and then, if we request importation, let IPMAN import by themselves. What we are trying to encourage is our local refinery. Let the government allow the local refinery to function properly and assist those who intend to refine products too,” he said.
Maigandi went further, offering Nigerians a direct assurance that independent marketers were prepared to slash petrol prices significantly, projecting that pump prices could fall below N800 per litre under the right market conditions, a figure that, if realised, would mark a dramatic relief for consumers who have endured months of elevated fuel costs.
“The price of the product is coming down bit by bit. Even when the price was increased, it was not increased at the same time. Likewise, now, as the price is coming down, we too are bringing the price down. If you check prices all over the country, you will see that independent petroleum marketers are reducing their prices gradually. Presently, we have reduced by N125 per litre nationwide,” he stated.
He added, “At any time when there is a reduction in price, we are ready to reduce the price to even below N800 per litre, not even N900. It depends on the way we buy the product from the private depot owners and the Dangote refinery. I thank God that the Dangote refinery has accepted independent petroleum marketers to start purchasing products directly. It is a plus, and very soon the populace will see the change in terms of price.”
The renewed push for importation rights arrives amid an already intense pricing battle in the downstream sector, one shaped by the commencement of large-scale production at the Dangote refinery and the broader deregulation of the petrol market, two forces that have fundamentally altered the competitive landscape marketers now operate within.
Speaking to journalists after a closed-door session with the assembled stakeholders, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, confirmed that the government remained concerned that current petrol prices were not reflective of prevailing crude oil prices in the international market. According to him, the government had engaged marketers in frank discussions aimed at ensuring that the reduction in global crude prices translates into genuinely lower pump prices for Nigerians.
“The engagements are ongoing. We had very fruitful and frank discussions with the marketers and the leaders of the downstream sector of the petroleum industry with a view to driving down the price of PMS,” Lokpobiri said. “My own opinion is that the petrol prices are not cost-reflective; they are not reflective of the cost of crude oil. But the marketers are also saying that crude oil prices are still high.
In fact, somebody told us right there that the crude oil price for a month is still over $90 per barrel. But we are saying that when Brent crude was over $118 per barrel, the price was rapidly going up. Now that the price has come down drastically, why has petrol not come down correspondingly? That is a worry.”
The minister disclosed that the government had communicated consumer concerns directly to operators and had directed them to return with practical measures capable of delivering lower petrol prices. “We have said that these are the issues of concern to the government. They have also said they will go back and think about what they can put together with a view to addressing the issue of the high cost of PMS that is not reflective of the price of crude in the market. We told them the concern of the Nigerian consumer, and they have also said they will go back and think of what concrete steps can be taken with a view to ensuring that the price drops,” he stated.
Pressed on when Nigerians should expect to see prices actually fall, Lokpobiri declined to commit to a firm deadline, noting only that discussions remained active. “As we called you today, we will call you as soon as possible. But the important thing is that discussions are ongoing,” he added.
Ahead of the closed-door session, Lokpobiri had issued a pointed warning to petroleum marketers against using profits accumulated from previously acquired, more expensive fuel inventories as justification for maintaining high petrol prices, insisting instead that the benefits of lower replacement costs must be passed on to consumers without delay.
The government’s position is that the continuing disconnect between falling international crude oil prices and stagnant domestic petrol prices has become a genuine source of concern, one that warrants a direct warning to marketers against sustaining high pump prices despite declining global crude values. Officials insist Nigerians should be enjoying the benefits of lower replacement costs in a market that has, at least on paper, been deregulated to reward efficiency rather than protect margins built on outdated pricing assumptions.
Lokpobiri was explicit that temporary gains realised from inventories purchased when crude oil prices were higher should not become the basis for sustaining elevated pump prices once global oil prices have declined. “I am aware that PMS pricing is influenced by several factors beyond crude oil prices, but it is equally important to distinguish between genuine replacement cost and windfall gains arising from inventory management.
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 stated.
According to the minister, as marketers replenish their stocks at lower costs, reductions in procurement expenses ought to be reflected promptly in both ex-depot and retail petrol prices, in line with the principles of a genuinely competitive and efficient deregulated market.
The minister further stressed that the Federal Government remains committed to protecting consumers in the post-subsidy era, insisting that deregulation was never designed to create room for excessive pricing or market distortions, but rather to deepen competition, improve efficiency, and deliver tangible value to Nigerians. He warned that sustaining high energy costs beyond what prevailing market conditions can justify risks worsening inflationary pressures and undermining the modest gains already recorded in moderating the country’s inflation rate.
Lokpobiri urged petroleum marketers and operators to immediately transmit the benefits of falling global crude oil prices to Nigerian consumers, cautioning that deregulation should never be exploited as a cover for sustaining artificially high petrol prices or generating windfall gains at the public’s expense.
His comments arrive amid growing public frustration over the slow pace of petrol price reductions despite the sharp moderation in crude oil prices recorded in recent months. According to the minister, international crude prices traded between $61 and $65 per barrel in January before surging above $118 per barrel in April, driven by heightened geopolitical tensions in the Middle East. Prices have since declined to around $71 per barrel following the easing of those tensions.
He noted that while the earlier spike in crude prices understandably exerted upward pressure on petrol prices, the subsequent decline has not been reflected proportionately in domestic pump prices. “Ordinarily, such movements in crude oil prices should be reflected in the pricing of refined petroleum products. While the initial increase in crude prices understandably exerted upward pressure on PMS prices, the subsequent moderation in crude oil prices has not translated into a commensurate reduction in pump prices across the domestic market.
This disconnect has understandably raised concerns. PMS peaked at about N1,596 per litre in May and currently sells at around N1,296 per litre. While there has been some reduction, the adjustment has not been commensurate with the decline in underlying market conditions,” the minister said.
Lokpobiri also called for the speedy operationalisation of the National Strategic Stock, describing it as a critical instrument for safeguarding national energy security and cushioning the country against future price shocks. “The National Strategic Stock will strengthen national energy security, reduce exposure to supply disruptions, and moderate price volatility. There is urgency in ensuring that this mechanism becomes fully operational,” he said.
Nigeria’s petrol market has witnessed sharp fluctuations over the past year, with pump prices peaking at over N1,500 per litre in some parts of the country amid spikes in global crude oil prices and exchange rate volatility. However, the recent decline in international oil prices, combined with improved domestic refining capacity, has increased pressure on marketers to cut prices, with many consumers now expecting further reductions in the coming weeks.
The outcome of the government’s engagement with operators could ultimately determine the next phase of competition in the downstream sector, and whether Nigerians will eventually see petrol prices fall to the N800 per litre level projected by marketers.
In his opening remarks ahead of the closed-door talks, the Authority Chief Executive of the NMDPRA, Rabiu Umar, explained that the meeting had been convened at the direct instruction of the minister to address growing concerns surrounding petrol pricing and to ensure Nigerians benefit from improvements in global market conditions.
Umar recalled that a similar engagement with operators in the domestic gas sector had recently produced a noticeable reduction in liquefied petroleum gas prices, expressing optimism that the same collaborative approach could deliver comparable results in the petrol market.
“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. When regulators and industry operators sit at the same table, we do not just debate challenges; we engineer solutions,” he said.
The NMDPRA boss acknowledged that global crude prices had moderated significantly in recent weeks but lamented that the domestic retail market had yet to adjust accordingly. “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 was equally direct about the limits of deregulation. “Deregulation is not a licence for market distortion or unfair consumer pricing. It is intended to drive efficiency, maximise value, and protect the public interest. Sustainable profitability for marketers and consumer welfare are not mutually exclusive. We need to build a transparent ecosystem where the benefits of market improvements are passed down to the Nigerian consumer in a timely and fair manner,” he added.
He stressed that the objective of the meeting was never to dictate prices to operators, but rather to collaborate with industry stakeholders on practical solutions capable of keeping businesses viable while simultaneously protecting consumers from the fallout of an imperfectly transmitted price mechanism.
Taken together, the events of Monday’s meeting reveal a downstream sector at a genuine inflection point. Marketers are dangling the prospect of sub-N800 petrol as proof that competition works when supply chains are opened up; the government is leaning on both moral suasion and regulatory pressure to force a faster pass-through of falling crude costs; and the Dangote refinery’s growing willingness to sell directly to independent marketers is reshaping the balance of power in a market long dominated by importation.
Whether any of this translates into a lighter burden at the pump for ordinary Nigerians in the coming weeks remains, for now, an open question, one that will be settled not in Abuja’s boardrooms but at the filling stations where the price is finally set.
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