The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has defended Nigeria’s deregulated petrol market, saying the average price of petrol in the country remains lower than in the United States and some African countries.
Lokpobiri made the statement on Channels Television’s Politics Today on Tuesday while responding to concerns over rising petrol prices and the Federal Government’s decision not to restore the former subsidy regime.
According to the minister, petrol currently averages about ₦1,430 per litre in Nigeria, compared with figures he cited of approximately ₦1,633 in the United States, ₦1,959 in Cameroon, and ₦2,070 in both Ghana and South Africa.
“In the US, the average, you know, litre of fuel is N1,633. In Nigeria, it’s on the average of N1,430. If you go to Cameroon, it’s N1,959. If you go to Ghana, it’s N2,070. If you go to South Africa, it’s N2,070,” Lokpobiri said.
The minister’s comments came as petrol prices in Nigeria remained elevated despite recent reductions in depot prices following a decline in international crude oil prices.
The Dangote Petroleum Refinery reduced its petrol depot price from ₦1,350 to ₦1,325 per litre, while other marketers also adjusted their prices in Lagos, Port Harcourt, Calabar and Warri.
However, pump prices remained considerably higher in some locations, with recent market checks putting petrol at around ₦1,430 per litre in major cities and as high as ₦1,500 in some less accessible areas.
Lokpobiri argued that Nigeria’s status as an oil-producing country does not automatically mean petrol must be cheaper than in other countries.
He noted that the United States is the world’s largest oil and gas producer and has substantial refining capacity, yet its petrol prices can still be higher than those in Nigeria.
“Despite the fact that Dangote Refinery is here, that doesn’t mean that the fuel price will be lower because Dangote Refinery is available,” he said.
The minister said deregulation had created room for private-sector investment in Nigeria’s downstream petroleum industry.
He argued that the Dangote Refinery would have faced difficulties operating under the former system if government continued importing petrol and selling it below market prices.
“For the policy of deregulation, Dangote Refinery wouldn’t have been the most attractive IPO in the continent. If government was continuously importing, as NNPC was doing, and selling at a lower price than the market price, Dangote wouldn’t have been able to survive.”
Lokpobiri said the objective of deregulation was to encourage investment across the midstream and downstream sectors and allow private businesses associated with the petroleum industry to operate commercially.
He also defended the removal of petrol subsidy, arguing that the money saved is now available for distribution to the three tiers of government through the Federation Account Allocation Committee, FAAC.
“These days we get 2.1 trillion being shared. This is the first time it is happening,” he said.
The minister argued that the additional revenue available to governments had helped states fund projects and meet their financial obligations.
Lokpobiri also rejected the idea that the government could simply dictate a lower petrol price under the current deregulated system.
“No, we don’t have power to control price because it is completely deregulated in line with global best standards all over the world,” he said.
He attributed recent pressure on petrol prices partly to movements in the international oil market, saying crude oil and refined petroleum products are globally traded commodities.
“Oil and gas is a global commodity. What is sold in New York is what is also sold here,” he said.
The minister said the impact of higher energy prices was being felt beyond Nigeria, including by consumers in the United States and Europe.
He maintained that the Federal Government would not reverse the deregulation policy, arguing that maintaining a market-based system was necessary to encourage investment in Nigeria’s petroleum industry.
The latest defence of deregulation comes as the domestic petrol market responds to fluctuations in international crude prices. Dangote’s latest reduction followed an earlier period of sharp price increases, including a September 12 adjustment that raised its petrol gantry price from ₦1,265 to ₦1,350 per litre.
Lokpobiri also pointed to increased domestic refining and other developments in the oil and gas sector as evidence of the changes taking place since deregulation.
Meanwhile, the Nigeria Labour Congress has called for government intervention to cushion consumers from rising petrol prices, including wage awards and the allocation of crude oil to local refineries in naira.
The contrasting positions reflect the continuing debate over Nigeria’s deregulated petrol market, with the Federal Government defending market pricing as necessary for investment while labour groups and other stakeholders continue to demand measures to reduce the immediate burden on consumers.
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