We Are Already Benefiting, Our Petrol Cheaper Than US – Minister Tells Nigerians Paying N1,350 Per Litre
The Federal Government has said it has no power to direct the price of petrol, insisting that full deregulation has tied local pricing to global market realities.
Minister of State for Petroleum Resources, Senator Heineken Lokpobiri, stated this during an appearance on Channels Television’s Politics Today, where he was questioned by anchor Seun Okinbaloye on why Nigerians are not benefiting from local refining in pricing.[Oil]
Lokpobiri said the government lacks any legal, fiscal or financial basis to fix pump prices under the Petroleum Industry Act [PIA]. He said crude oil and refined products remain global commodities and Nigeria does not exist in isolation.
He said, “No legal basis, no fiscal basis, no financial basis, nothing! Crude oil and refined product is a global business. Nigeria doesn’t exist in isolation. And so you cannot arbitrarily fix price, unless you want to roll back the issue of subsidy.”
When asked how much it would cost to bring price down to N1,000, N800 or N700 per litre, Lokpobiri said, “No, we don’t have power. Because it is completely deregulated in line with global best standards.”
He dismissed calls for production subsidy, arguing that even major producers like Saudi Arabia and the United States sell crude to their domestic refiners at international benchmark prices. He said Dangote Refinery must buy crude at the global price, so local production does not mean cheaper fuel.
He said, “Whether we are producing 3 million barrels today, the price will not materially change because it is a global commodity. Dangote will have to buy the crude at the price that is global.”
Seun had argued that if crude is extracted in Nigeria, refined in Nigeria by Dangote at about 700,000 barrels per day, and consumed in Nigeria, with gantry price reportedly rising to about N1,350 per litre, why should Nigerians still bear almost the full shock of international crude pricing and exchange rate movements, especially when the chain of transportation and importation has been removed.
Lokpobiri said Nigerians are already benefiting through availability and through a price that is still lower than that of the United States, which he described as the highest producer of crude oil today with the highest number of refineries, yet selling at a higher price than Nigeria.
He said, “We are already benefiting. That’s why our price is lower than that of the US. The United States is the highest producer of crude oil today. Today, the price in the USA is higher than that of Nigeria.”
He maintained that pricing is global and not peculiar to Nigeria. “It’s not just Nigerians. Those in the US too are buying at a price higher than the average Nigerian price. And all the countries around us have higher prices. Nigeria’s price is still lower than even the global benchmark,” he said.
He said local refining primarily guarantees product availability and security of supply rather than immunity from global price movements, while acknowledging the pressure high energy costs exert on households.
