Petrol Prices Refuse to Drop Below N1,000 Despite Lower Global Crude Costs
Motorists hoping for a sharp reduction in petrol prices may have to wait longer, as industry insiders say pump prices are unlikely to drop below N1,000 per litre in the near term unless fuel importers trigger aggressive competition with the Dangote Petroleum Refinery. The expectation of cheaper petrol followed the recent decline in global crude oil prices to around $70 per barrel after oil shipments through the Strait of Hormuz gradually resumed.
Many Nigerians anticipated that local fuel prices would return to levels seen before geopolitical tensions involving the United States and Iran drove up crude prices. However, despite the easing of international oil prices, retail petrol prices have remained largely unchanged, with only slight adjustments announced by the Dangote refinery.
Dangote Refinery Explains Why Prices Remain High
Since late 2024, the Dangote Petroleum Refinery has emerged as Nigeria's dominant fuel price setter, replacing the Nigerian National Petroleum Company Limited (NNPCL), which previously held that position when it was the country's primary petrol importer due to non-functional local refineries. As public pressure mounts for lower pump prices, a senior official of the Dangote Group, speaking exclusively to The PUNCH, maintained that the Federal Government should direct licensed fuel importers to reduce their own prices rather than expecting the refinery to shoulder the burden alone.
According to the official, the refinery still holds substantial inventories of crude oil purchased when international prices were significantly higher. He explained that the company also has crude cargoes currently in transit to Nigeria as well as forward purchase agreements that were concluded before the recent drop in global oil prices. The source said these factors mean the refinery's production costs are still tied to more expensive crude, making an immediate and substantial reduction in petrol prices commercially difficult. The official added that if importers truly have access to cheaper products based on current international market conditions, they should pass those savings on to consumers by lowering their pump prices while maintaining reasonable profit margins.
Government Warns Against Consumer Exploitation
The continued high cost of petrol has also drawn the attention of the Federal Government. The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, recently cautioned that the government would not tolerate profiteering or any practices designed to exploit Nigerians through excessive fuel pricing. His warning came amid growing public dissatisfaction over the disconnect between falling global crude oil prices and the relatively stagnant pump prices.
Read also: Petrol marketers explain major obstacles preventing immediate fuel price cuts. The development highlights the continuing debate over fuel pricing in Nigeria's deregulated downstream petroleum sector, where operators insist that prices are determined by prevailing market conditions, exchange rates, product acquisition costs, transportation expenses, and other operational factors.
Marketers Threaten to Stop Sales if Price Controls Are Imposed
Fuel marketers have warned that they will stop selling petrol if the government attempts to impose price controls. They argue that the current pricing structure reflects the true cost of importing and distributing fuel, and any artificial cap would make their operations unsustainable. Many filling stations would be compelled to suspend petrol sales if such measures were introduced.
For now, industry observers believe Nigerians are unlikely to see petrol prices fall below the N1,000-per-litre mark unless increased competition among importers or a prolonged decline in crude oil prices significantly reduces the overall cost of supplying fuel to the domestic market.
