FG orders marketers to reduce fuel price
***Dangote Refinery determines price changes — Marketers
***NLC blames govt for fuel price standoff
By Udeme Akpan, Energy Editor, Victor Young, Ediri Ejoh & Obas Esiedesa
LAGOS — The Federal Government has directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to ensure petroleum marketers do not exploit Nigerians through excessive pricing under the deregulated downstream petroleum market.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, gave the directive in Abuja yesterday while delivering the keynote address at the NMDPRA General Counsel and Legal Advisers Forum.
The two-day forum has as its theme: “Beyond Compliance: Driving Regulatory Certainty and Investment Confidence in Nigeria’s Petroleum Sector.”
Lokpobiri said although the downstream sector had been fully deregulated, the regulator must ensure that deregulation does not become an avenue for profiteering at the expense of consumers.
According to him, following de-escalation of tensions in the Middle East and decline in global crude prices, Nigerians expected corresponding reductions in the pump price of Premium Motor Spirit, PMS, popularly known as petrol.
However, this is yet to happen, as refiners and marketers have continued to sell petrol at elevated pump prices despite the significant decline in crude oil prices from a peak of $120 per barrel to about $72 per barrel last week.
He said: “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.
“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 charged the agency to intensify monitoring to ensure consumers receive the correct quantity of fuel purchased at filling stations.
‘What is the regulator doing?’ Lokpobiri asks
He said: “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.”
Lokpobiri noted that despite recent geo-political tensions arising from the conflict involving the United States and Iran, Nigeria did not experience fuel shortages, attributing the stability to deregulation of the downstream sector and operationalisation of domestic refineries.
He described the Petroleum Industry Act, PIA, as the foundation for transforming Nigeria’s petroleum industry but stressed that building investor confidence now depends on consistent and predictable regulation.
He said: “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.”
The minister urged legal advisers and general counsel in the petroleum industry to serve as strategic partners in promoting investment, rather than becoming obstacles through unnecessary regulatory bottlenecks.
According to him, “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.”
Earlier, Chief Executive of NMDPRA, Mallam Rabiu Umar, said the petroleum industry has reached a stage where regulatory certainty, transparency and investor confidence has become more important than mere compliance with regulations.
Umar said implementation of the PIA shifted focus from what the law provided to how it is being implemented and whether it is delivering the certainty required by investors.
He said: “Compliance remains the foundation. The broader objective is to create a petroleum industry characterised by certainty, predictability, transparency and confidence.”
In his presentation, Secretary and Legal Adviser, NMDPRA, Dr Joseph Tolorunse, explained that regulatory certainty had ensured stability of fiscal rules throughout the lifespan of projects and prevented policy reversals.
Tolorunse noted that the law has made Nigeria’s oil and gas industry more competitive, adding that increased competitiveness will attract investment, with “investment leading to growth.”
Meanwhile, Nigeria’s downstream petroleum sector continued to record marginal movements in petrol prices across major depots in Lagos, Port Harcourt, Calabar and Warri yesterday, reflecting continued market adjustments among petroleum marketers and depot operators.
The latest mid-day market data showed that PMS depot prices remained largely stable, with most locations recording slight reductions of between N1 and N6 per litre, while a few depots maintained unchanged prices.
In Lagos, one of Nigeria’s major petroleum trading hubs, PMS prices across several terminals recorded downward adjustments. African Terminal reduced its PMS price from N1,125 to N1,122 per litre, representing a N3 decline, while AIPEC adjusted its price from N1,125 to N1,124 per litre.
Other Lagos-based facilities, including AITEO, BONO, EMADEB and TECHNO OIL, also recorded marginal reductions. EMADEB posted the biggest decline among Lagos terminals, cutting price from N1,125 to N1,119 per litre, a reduction of N6.
The Lagos market continues to reflect the impact of increased domestic refining capacity and stronger competition among suppliers, particularly following the growing role of local refiners in meeting national fuel demand.
In Port Harcourt, depot prices also recorded mixed movements. Automotive Gas Oil (AGO), popularly known as diesel, witnessed notable changes, with some terminals increasing prices. African Terminal’s AGO price rose from N1,435 to N1,503 per litre, representing an increase of N68.
Duport also increased its price from N1,435 to N1,503 per litre, while Menj and Wosbab recorded similar increases of N63 per litre.
However, some operators reduced diesel prices. Matrix and Sigmund depots lowered AGO prices by N20 per litre, reducing them from N1,505 to N1,485 and from N1,503 to N1,483, respectively.
For PMS in Port Harcourt, prices remained relatively stable, with several depots trading within the N1,120–N1,126 per litre range.
The Calabar market also recorded modest adjustments. Fynfield reduced its PMS price from N1,145 to 1,140 per litre, while Soroman maintained its price at N1,140 per litre.
In Warri, PMS prices remained largely stable with slight downward adjustments. Matrix reduced price from N1,135 to N1,133 per litre, while Nepal adjusted from N1,133 to N1,132 per litre. Prudent also cut price from N1,135 to N1,133 per litre.
The latest depot price trends indicate a relatively stable downstream market, with PMS prices showing signs of moderation in several locations despite ongoing fluctuations in diesel prices.
Dangote Refinery determines price changes — Marketers
Managing Director of 11 Plc, Osagie Ogedegbe, said Dangote Refinery currently plays a dominant role in determining petrol prices in the country. He said: “Everybody gets petrol from Dangote and sells at the price it advises. This is the outcome of a country having just one refinery.
“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.
“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.”
Also speaking, an energy expert and Lead Strategic Consultant at Acepontis Ltd, Atiemoria Ebhodaghe, said: “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.
“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.
“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.
“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.”
Also speaking, an operator in the Major Energies Marketers Association of Nigeria, MEMAN, who pleaded anonymity, said pump prices are expected to decline gradually because marketers are still recovering losses incurred over the past 18 months.
“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.
“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. 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.
“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 yet to benefit from recent market adjustments — Petroleumprice.ng
Despite the significant decline in global crude oil prices and the reduction in petroleum product prices at depots across Nigeria, petrol prices at filling stations have remained largely unchanged, raising concerns among industry stakeholders over slow response of downstream operators.
The observation was made by Petroleumprice.ng, which noted that consumers are yet to benefit from recent market adjustments.
Commenting on the situation, Managing Director of Petroleumprice.ng, Mr Olitide Jeremiah, said the industry is still awaiting a corresponding response from downstream operators.
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.”
Marketers slown to adjust prices — OGSPAN
The National President of the Oil and Gas Services Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, attributed the slow adjustment of pump prices to the absence of a fully responsive deregulated downstream petroleum market.
According to him, price adjustments in Nigeria’s petroleum market have historically been quicker when prices rise than when they decline.
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.”
NLC blames govt for fuel price standoff
Meanwhile, the Nigeria Labour Congress, NLC, has blamed the Federal Government for the apparent refusal of marketers to reduce the pump price of petrol, despite sustained decline in crude oil prices in the international market.
Reacting yesterday, an NLC official, who spoke to Vanguard on condition of anonymity, said Nigerians should hold the Federal Government accountable for what the Congress described as excessive powers being exercised by marketers in the downstream petroleum sector.
The official said: “We warned government against creating a monopoly in the downstream petroleum industry. Unfortunately, our fears have now been confirmed.
‘’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 NLC argued that genuine deregulation can only exist where there is healthy competition, transparency and effective regulation, not where a few dominant players are allowed to dictate prices without regard to prevailing market realities.
“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 labour centre noted that, with decline in global crude oil prices and improvements in other market indicators, Nigerians should ordinarily be benefiting from lower fuel prices.
According to NLC, the continued refusal by marketers to reduce pump prices raises serious concerns about effectiveness of the current deregulation framework and whether it is serving the interests of consumers or a privileged few.
The Congress recalled that it had consistently warned against policies that concentrate excessive market power in the hands of a few operators, stressing that such an arrangement would inevitably lead to price manipulation and profiteering at the expense of the public.
The NLC urged the Federal Government to take immediate steps to dismantle monopolistic practices in the downstream petroleum sector, promote genuine competition and strengthen regulatory oversight to ensure that Nigerians benefit from favourable developments in the international oil market.