FG Orders Fuel Marketers to Cut Petrol Prices, Warns Against Profiteering

FG Orders Fuel Marketers to Cut Petrol Prices, Warns Against Profiteering

 

The Federal Government has directed petroleum marketers to immediately reflect the recent drop in global crude oil prices by reducing the pump price of petrol, warning that Nigerians must not be exploited under the country’s deregulated downstream petroleum market.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, gave the directive in Abuja on Monday while delivering the keynote address at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) General Counsel and Legal Advisers Forum.

He also tasked the NMDPRA to ensure that deregulation does not become a cover for excessive profiteering by marketers and fuel suppliers, stressing that the agency has a legal responsibility to protect consumers while promoting a competitive market.

The two-day forum has as its theme: “Beyond Compliance: Driving Regulatory Certainty and Investment Confidence in Nigeria’s Petroleum Sector.”

Lokpobiri said the recent easing of geopolitical tensions in the Middle East, particularly between Iran and the United States, had pushed global crude oil prices down from about $120 per barrel to around $72, creating expectations that petrol prices in Nigeria would also decline.

He, however, expressed concern that despite the significant fall in crude prices, refiners and marketers had continued to sell Premium Motor Spirit (PMS), popularly known as petrol, at high pump prices.

“Following the de-escalation of tensions between Iran and the United States, we expected to see a commensurate downward adjustment in the prices of PMS and other petroleum products. However, that has not yet happened,” the minister said.

“While we believe that market forces will eventually restore equilibrium, the regulator also has a statutory responsibility to ensure that deregulation does not become an avenue for profiteering. This must be done in line with the extant provisions of the Petroleum Industry Act.”

Lokpobiri further directed the NMDPRA to strengthen surveillance across filling stations to ensure motorists receive the exact quantity of fuel they pay for.

“Beyond allowing prices to be determined by market forces, the question is: what is the regulator doing to ensure that consumers receive the correct quantity of product? When someone pays for 10 litres of Premium Motor Spirit, they should receive exactly 10 litres, not less,” he said.

The minister added that despite the recent geopolitical tensions involving the United States and Iran, Nigeria did not experience fuel shortages, attributing the stability to the deregulation of the downstream petroleum sector and the growing contribution of domestic refineries.

The deregulation of Nigeria’s downstream petroleum sector gathered pace after the removal of petrol subsidy by President Bola Tinubu in May 2023. Since then, the prices of Premium Motor Spirit (PMS) have been determined largely by market forces, including international crude oil prices, foreign exchange rates and supply costs, resulting in frequent adjustments at filling stations across the country.

In recent weeks, global crude oil prices have dropped sharply following the easing of tensions in the Middle East, particularly after fears of a wider conflict involving Iran and the United States subsided. The decline in crude prices raised expectations among Nigerians that petrol pump prices would also fall, as marketers had previously increased prices when global oil prices surged.

However, many marketers have largely maintained existing pump prices despite the lower cost of crude oil, prompting criticism from consumers and labour groups. The Federal Government’s latest directive is aimed at ensuring that the benefits of lower international oil prices are passed on to Nigerians while preventing profiteering and sharp practices in the deregulated petroleum market.