The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has defended the Federal Government’s decision to remove petrol subsidies and deregulate the downstream petroleum sector, saying petrol prices in Nigeria are still lower than those in the United States and some other African countries.
Speaking with the journalist on Tuesday, Lokpobiri said the recent decline in international crude oil prices had already begun to affect petrol prices in Nigeria. Dangote Petroleum Refinery, for instance, reduced its depot price from N1,350 to N1,325 per litre, while other fuel marketers also announced price reductions in several parts of the country. Despite these cuts, petrol was still being sold for between N1,370 and N1,450 per litre in some locations.
The minister stated that petrol currently costs an average of about N1,430 per litre in Nigeria, compared with approximately N1,633 in the United States, N1,959 in Cameroon, and about N2,070 in both Ghana and South Africa.
Lokpobiri argued that being an oil-producing country does not automatically guarantee cheaper petrol. He noted that the United States, despite being the world’s largest oil and gas producer and having substantial refining capacity, still has higher petrol prices than Nigeria.
He also maintained that the presence of the Dangote Refinery alone would not necessarily lead to cheaper fuel. According to him, deregulation has created a more competitive environment and encouraged private investment in Nigeria’s oil and gas industry.
The minister further argued that Dangote Refinery would have struggled to operate if the government had continued importing petrol and selling it below market value through subsidies. He said deregulation was introduced to provide greater opportunities for private-sector participation in the midstream and downstream petroleum sectors.
On the removal of the petrol subsidy, Lokpobiri said the money saved is now being distributed among the federal, state and local governments through the Federation Account Allocation Committee (FAAC). He claimed that monthly allocations have increased significantly, allowing states to pay salaries and undertake major development projects.
Addressing concerns about high energy costs, the minister said Nigeria was not alone in experiencing the effects of global oil prices. He explained that petroleum is traded internationally, meaning changes in the global energy market affect consumers in different countries.
Lokpobiri insisted that the government would not reverse the deregulation policy, arguing that maintaining it was necessary to attract investment and strengthen the petroleum sector. He pointed to Dangote Refinery’s supply of aviation fuel and improvements in Nigeria’s foreign reserves as some of the benefits of developments in the industry.
He also cited a recent statement attributed to the Central Bank of Nigeria that about 85 per cent of the country’s foreign reserves are generated from the oil and gas sector.
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