Bimpe Adebayo
Amid continued debates over fuel affordability and market fairness in Nigeria’s deregulated downstream petroleum sector, the Federal Government has stepped up calls for stricter regulatory oversight to prevent exploitative pricing practices.
The directive came from the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who tasked the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, with ensuring that petroleum marketers do not take advantage of deregulation to overcharge consumers.
Speaking in Abuja at the NMDPRA General Counsel and Legal Advisers Forum themed “Beyond Compliance: Driving Regulatory Certainty and Investment Confidence in Nigeria’s Petroleum Sector,” the minister stressed that market freedom must not translate into consumer hardship.
He acknowledged that while deregulation is designed to allow market forces determine prices, regulatory responsibility remains critical in preventing abuse. According to him, recent global developments had created expectations of relief at the pump that have yet to materialise.
Lokpobiri explained:
“Following 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.”
He further cautioned that while pricing mechanisms may eventually stabilise, regulators must remain proactive.
“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.”
The minister also raised concerns beyond pricing, particularly on measurement accuracy at filling stations, insisting that consumers must receive full value for what 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.”
Despite global oil price fluctuations—from highs of about $120 per barrel down to roughly $72 recently—domestic petrol prices have remained elevated, sparking renewed public scrutiny of market behaviour.
Lokpobiri, however, noted that Nigeria avoided fuel shortages during recent geopolitical tensions involving the United States and Iran, attributing this stability to deregulation and the gradual impact of local refining.
He also pointed to the Petroleum Industry Act (PIA) as a critical reform framework, but stressed that its success depends on how effectively it is implemented and interpreted by institutions.
“The PIA gave us the architecture. What we must now build is the culture, the institutional habits, the interpretive discipline and the regulatory character that make the law’s objectives real for every investor evaluating Nigeria against any other destination in the world.”
He urged legal advisers within the sector to act as enablers of investment rather than gatekeepers slowing down progress.
“We will not be judged by the number of regulations we produce or the volume of guidelines we issue. We will be judged by the investments we attract, the businesses we enable, the jobs we create and the value we leave behind for future generations.”
On his part, the Chief Executive of NMDPRA, Rabiu Umar, emphasised that the industry’s next phase must prioritise regulatory certainty, transparency, and investor confidence over mere compliance.
He noted that implementation of the PIA has shifted attention from legislative design to practical execution, with growing expectations that the sector must deliver predictable outcomes for investors and consumers alike.
Earlier, Dr. Joseph Tolorunse, Secretary and Legal Adviser at NMDPRA, highlighted that stable regulatory frameworks help safeguard long-term petroleum projects by preventing abrupt policy reversals and improving competitiveness.
He maintained that increased competitiveness in the oil and gas sector would naturally attract more investment, with capital inflows driving broader economic growth.
Mixed Price Movements in Depot Markets
While policy discussions dominated Abuja, Nigeria’s downstream market continued to reflect subtle but notable price adjustments across major depots in Lagos, Port Harcourt, Calabar, and Warri.
Recent trading data showed that Premium Motor Spirit (PMS) prices largely remained stable, with only marginal declines ranging between N1 and N6 per litre in several locations. Some depots, however, held prices steady.
In Lagos, several terminals recorded slight reductions. One of the more noticeable adjustments came from EMADEB, which reduced its PMS price by N6 per litre, while others such as African Terminal and AIPEC also posted minor declines.
The pattern suggests growing influence of domestic refining capacity and increased competition among suppliers, which continues to shape pricing behaviour in the commercial hub.
Port Harcourt presented a more mixed picture, especially in Automotive Gas Oil (diesel) pricing. Some depots, including African Terminal and Duport, recorded significant increases, while others such as Matrix and Sigmund reduced prices by about N20 per litre.
PMS prices in the city remained relatively steady, mostly trading within a narrow range.
In Calabar, movements were modest, with slight reductions recorded in some depots while others maintained stable pricing. Warri followed a similar pattern, with small downward adjustments across select operators but no major disruptions.
Overall, the market trend points to relative stability in petrol pricing across depots, even as diesel prices continue to fluctuate more sharply. The broader downstream sector appears to be adjusting gradually under deregulation, with price signals increasingly tied to global crude movements and local supply dynamics.
Marketers Say Dangote Refinery Influences Petrol Pricing
Energy operators and industry stakeholders have linked current petrol pricing trends in Nigeria to the dominant role of the Dangote Refinery, while also pointing to exchange rate stability and global crude movements as key factors that could ease prices in the coming weeks.
The Managing Director of 11 Plc, Osagie Ogedegbe, said the refinery has become a central force in determining market prices due to its scale and supply position in the domestic market.
“Everybody gets petrol from Dangote and sells at the price it advises. This is the outcome of a country having just one refinery,” he said.
Ogedegbe, however, expressed optimism that relief may soon be seen at the pump, citing improvements in exchange rate stability and declining global crude prices despite lingering geopolitical tensions.
“However, the price will soon begin to decline because there has been stability in the country’s exchange rate. Despite the Middle East crisis, which is not yet fully resolved, there is hope that with the steady decline in crude oil prices in the international market, the price of petrol will gradually nosedive,” he said.
He further projected a possible downward review in prices in the short term, provided macroeconomic conditions remain steady.
“I am very optimistic that the price will be reviewed downward between now and next week if the exchange rate remains stable and crude oil prices continue to fall.”
An energy expert and Lead Strategic Consultant at Acepontis Ltd, Atiemoria Ebhodaghe, attributed the persistence of high pump prices to market behaviour often described as the “rockets and feathers” phenomenon.
“Nigerian pump prices remain high despite falling global crude oil prices largely because of the ‘rockets and feathers’ market phenomenon, where marketers are quick to raise prices when crude oil prices increase but deliberately delay passing savings on to consumers when prices fall until old, expensive inventory has been exhausted,” he explained.
He also noted that even with domestic refining gains, broader macroeconomic pressures continue to influence production costs.
“We should also understand that while Dangote Refinery now purchases local crude in naira, the valuation of that crude remains pegged to the global dollar market, meaning that the depreciation of the naira continues to inflate baseline production costs,” he said.
Ebhodaghe added that recent global crude price declines and adjustments in wholesale and retail pricing suggest eventual relief, though transmission to consumers remains gradual.
“However, the decline in international crude oil prices indicates that relief is structurally on the way, as evidenced by recent cuts in wholesale gantry prices and NNPC’s reduction of its retail price to roughly N1,210 per litre in Abuja,” he said.
He stressed that sustained price relief would depend on stronger currency performance and stricter regulatory enforcement across the downstream value chain.
“Ultimately, until the naira strengthens and stricter regulatory compliance compels independent marketers to align with the new landing costs, the average Nigerian consumer will continue to experience delays in price reductions and pay high prices at filling stations.”
An operator within the Major Energies Marketers Association of Nigeria (MEMAN), who spoke anonymously, said fuel prices are likely to decline gradually, but added that marketers are still working through significant financial losses from previous market cycles.
“The price is expected to go down slowly because marketers are trying to recover their losses. Marketers have recorded very significant losses over the last 18 months,” the source said.
He explained that pricing adjustments in the downstream sector are often tied to inventory cycles and accounting systems that reflect past purchase costs.
“Losses occur throughout the supply chain every time prices fall. Marketers therefore reduce prices as gradually as possible in order to recover as much as they can,” he said.
“When prices increase, marketers enter the new price into their Enterprise Resource Planning, ERP, system, which immediately reflects the value of the stock available before they begin selling. The reverse happens whenever prices fall.”
He maintained that such practices are standard in global trading operations, noting that refiners and suppliers are not expected to absorb downstream losses.
“This is standard practice in every trading business. What Dangote Refinery can do is try as much as possible to keep costs low, but it is not going to absorb your losses, neither will Dangote subsidise them,” he said.
Consumers Still Waiting for Relief at the Pump
A noticeable disconnect is emerging in Nigeria’s downstream petroleum sector, where recent declines in global crude oil prices and lower depot prices have yet to translate into cheaper petrol for end users. While market indicators have shifted downward, filling stations across the country have largely maintained existing pump prices, leaving consumers without immediate relief.
Industry tracking platform Petroleumprice.ng observed that the adjustment in upstream and depot pricing has not been mirrored at retail outlets, raising questions about transmission efficiency within the supply chain.
The Managing Director of Petroleumprice.ng, Mr Olitide Jeremiah, described the situation as one where market signals have not fully filtered down to consumers. He said: “Despite the significant drop in crude oil prices and depot prices across Nigeria, the prices of petrol and other petroleum products have remained high at filling stations. We are still waiting to see how downstream operators will respond to developments in the global market and at the depots.”
His remarks highlight a growing expectation that retail prices should begin to reflect global and domestic cost movements more quickly, especially in a deregulated environment.
Industry Stakeholders Cite Structural Weakness in Price Response
Operators within the sector argue that the slow adjustment is not unusual in Nigeria’s petroleum market, pointing instead to structural inefficiencies in the downstream system.
The National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), Mazi Colman Obasi, explained that price movements in the sector tend to be asymmetrical, responding faster to increases than to decreases.
He said: “We don’t have a very dynamic downstream market yet. Once prices go up in Nigeria, it is not always easy to bring them down and stabilise the market.”
His position reflects long-standing concerns that the country’s deregulation framework has not yet produced a fully competitive environment where price changes are quickly transmitted across all levels of distribution, from depots to retail outlets.
Labour Raises Concerns Over Market Power and Regulation
On the labour front, the Nigeria Labour Congress (NLC) has taken a more critical stance, blaming the Federal Government for what it describes as structural flaws that allow marketers excessive influence over pricing outcomes.
An unnamed NLC official argued that the current situation reflects deeper issues in market design and oversight. The official said: “We warned government against creating a monopoly in the downstream petroleum industry. Unfortunately, our fears have now been confirmed.”
The official added: ‘’We are not surprised by the greed being displayed by the marketers because it was the government that empowered them. Nigerians should hold government responsible for the excessive powers that marketers are exerting in the downstream petroleum sector.”
The labour body insists that true deregulation requires not just price liberalisation but also strong competition and effective regulation. It further warned that the absence of these conditions risks undermining the intended benefits of deregulation for ordinary citizens.
“How can anyone claim that the sector has been deregulated without first creating a conducive environment for competition? What we have today is not a competitive market but a monopoly that has been allowed to thrive unchecked. The government has allowed a monopoly to grow out of control in the sector, and ordinary Nigerians are paying the price,’’ the Congress said.
The NLC also noted that, given recent declines in crude oil prices and improvements in market fundamentals, consumers should ordinarily be seeing reduced fuel costs, but that this has not happened due to what it describes as entrenched market control and weak oversight.
It urged the Federal Government to intervene by strengthening competition, dismantling monopolistic tendencies, and reinforcing regulatory mechanisms to ensure that global price movements are reflected more fairly at the pump.