FG to Fuel Marketers: Stop Using Old Stock to Keep Petrol Prices High

The Federal Government has warned petroleum marketers against using the cost of old fuel inventories as an excuse to keep petrol prices high, insisting that Nigerians should benefit whenever the cost of replacing fuel drops.

The warning was issued by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, during a stakeholders’ meeting on the cost-reflective pricing of Premium Motor Spirit (PMS) held at the headquarters of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja.

The meeting brought together key players in the downstream petroleum sector, including representatives of Dangote Petroleum Refinery, the Federal Competition and Consumer Protection Commission (FCCPC), the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), and other industry stakeholders.

Addressing participants, Lokpobiri said while petrol prices are influenced by several factors—including exchange rates, logistics, and supply chain costs—marketers should not continue to base pump prices on fuel purchased when crude oil prices were much higher.

He explained that any temporary profits made from old inventories should not be used to justify keeping retail prices elevated after replacement costs have declined.

According to the minister, once marketers replenish their stock at lower prices, those savings should be reflected at filling stations without unnecessary delays. He stressed that this is essential for maintaining a competitive and transparent deregulated market.

Lokpobiri also expressed concern that despite the recent decline in global crude oil prices, petrol prices across Nigeria have not fallen in line with market realities.

He noted that crude oil prices climbed from between $61 and $65 per barrel in January to more than $118 per barrel in April due to geopolitical tensions in the Middle East before dropping to around $71 per barrel. While the earlier spike pushed petrol prices higher, he said the subsequent drop has not resulted in a proportional reduction at the pumps.

He revealed that the average price of PMS peaked at about ₦1,596 per litre in May and currently stands at roughly ₦1,296 per litre, adding that the reduction remains inadequate compared to the decline in underlying market costs.

The minister warned that keeping fuel prices artificially high could worsen inflation and undermine the country’s recent economic progress. He pointed out that Nigeria’s inflation rate has fallen significantly from about 34 percent in 2024 to 15.9 percent, cautioning that persistently high energy costs could slow the recovery.

Lokpobiri directed the NMDPRA to strengthen market surveillance and enforce greater transparency across the petroleum supply chain to ensure that lower costs are passed on to consumers. He emphasized that fuel prices should reflect fair market conditions rather than information gaps or anti-competitive practices.

He also commended the Federal Government’s ongoing reforms, including the removal of fuel subsidy and the crude-for-naira initiative, describing them as policies that have improved competition in the downstream sector. In addition, he called for the speedy operationalisation of the National Strategic Stock to strengthen Nigeria’s energy security and help cushion future price shocks.

Earlier, NMDPRA Chief Executive Rabiu Umar said the meeting was convened in response to growing public concern over the disconnect between falling international market indicators and the retail price of petrol in Nigeria.

According to Umar, the objective was not to fix fuel prices but to engage industry stakeholders in finding practical solutions that protect consumers while ensuring the sustainability of businesses operating within the deregulated downstream petroleum sector.