Lokpobiri: Tinubu Govt Cannot Reduce Petrol Price; Fuel Cheaper In Nigeria Than US
The President Bola Tinubu-led Nigerian government has said it has no power to reduce or increase the price of petrol in the country, insisting that the price of Premium Motor Spirit (PMS), popularly known as petrol, is determined by global market forces.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, stated this during an interview on Channels Television, while defending the current petrol pricing regime under Tinubu’s administration.
Lokpobiri also claimed that petrol is currently cheaper in Nigeria than in the United States, despite the US being one of the world’s largest crude oil producers and having a large refining capacity.
“Our (petrol) price is lower than that of the US. I told you that the United States is the highest producer of crude oil today,” Lokpobiri said.
“The United States is one of the countries with the highest level of refineries. Today, the price in the US is higher than that of Nigeria.”
The minister was responding to questions over whether Nigerians should benefit from the local production and refining of crude oil, particularly with the Dangote Refinery now supplying refined petroleum products to the domestic market.
The minister was asked why Nigerians should continue to face high petrol prices when crude oil is extracted in Nigeria, refined locally and consumed within the country.
The discussion also referenced the current rise in the petrol gantry price to ₦1,315 per litre and above amid higher international crude oil prices.
The petroleum minister was asked why Nigerian consumers should continue to bear the impact of international crude prices and exchange-rate movements if the product is being refined domestically.
Lokpobiri, however, maintained that crude oil and refined petroleum products are traded in a global market and that Nigeria cannot independently dictate the price.
“Crude oil and refined products are a global business. Nigeria doesn’t exist in isolation,” he said.
“And so you cannot arbitrarily, unless you want to roll back the issue of subsidies.”
When asked directly whether the Tinubu administration has the power to reduce or increase petrol prices, the minister replied: “No, we don’t.”
According to him, the downstream petroleum sector is now completely deregulated, saying, “Because it is completely deregulated in line with global best standards,” Lokpobiri said.
The minister argued that increased domestic crude production would not necessarily translate into substantially lower petrol prices because crude remains an internationally traded commodity.
“As far as I’m concerned, whether we are producing three million barrels today, the price will not materially change because it is a global commodity,” he said.
The minister noted that even oil-producing countries sell crude to refineries based on international market prices.
He cited Saudi Arabia as an example, arguing that increased crude production by an oil-producing country does not automatically mean that its domestic refiners will receive crude at a heavily discounted price.
Lokpobiri also rejected the suggestion that Nigerians are receiving little or no benefit from the country’s transition from imported refined petroleum products to domestically refined products.
“You are benefiting because, one, you have availability,” he said.
When pressed on the issue of pricing, the minister argued that Nigerians should benefit more directly from the elimination of some of the transportation and importation costs associated with bringing refined petroleum products into the country.
When challenged that Nigerians appeared to be bearing the impact of international crude prices and exchange-rate fluctuations despite the increasing availability of locally refined products, Lokpobiri responded that the situation was not peculiar to Nigeria.
“So, it’s not just Nigerians. Those in the U.S. too. I just told you that the U.S.A. is the highest producer of oil and gas, yet they are buying it at a price higher than the average Nigerian price,” he said.
Lokpobiri added that several countries around Nigeria also sell petrol at higher prices.
“Nigeria’s price is still lower than even the global benchmark. So, it’s something that is not peculiar to Nigeria,” Lokpobiri said. “It is something that is universal.”
The minister’s comments come amid continued public debate over astronomical petrol price rises in Nigeria following the removal of fuel subsidy by the Tinubu administration and the subsequent deregulation of the downstream petroleum sector.
The subsidy removal in May 2023 led to a sharp increase in petrol prices, with subsequent adjustments largely influenced by international crude oil prices, foreign exchange movements and domestic market conditions.
The development has continued to fuel calls from Nigerians and some stakeholders for measures that would make locally refined petrol significantly cheaper for domestic consumers.
