Oil and gas expert, Toyin Akinosho, has said Nigerians should not be paying high petrol prices at the pump when international crude oil prices have fallen, arguing that consumers should benefit from the country’s deregulated downstream petroleum market.
Speaking during an interview with ARISE NEWS on Tuesday, Akinosho said the principle of deregulation is that pump prices should reflect prevailing market conditions, adding that fuel prices ought to decline when the cost of crude oil drops. He maintained that consumers should not be disadvantaged by delays in passing on lower international prices.
“We shouldn’t be paying,high price when crude oil prices have come down. We should be paying the kind of price that is tied and relative to whatever lower, that’s what that’s why we fought for deregulation. The whole idea of saying that let people sell relative to what they buy, is so that we, the consumers, shouldn’t be cheated,” he said.
Akinosho said marketers may not immediately reduce pump prices because they are still selling products bought at higher crude oil prices. He noted that although global crude prices have fallen, Nigeria’s market has been slower to adjust as existing inventories are being cleared.
“You know what happens when you purchase some goods at a certain amount, and because we are deregulated, we’re not one of those countries where the price at the pump is announced on a monthly basis, or we we’ve moved away from anything that is supposedly called price control. What is going on now is that there’s been a bulk of crude that you’ve purchased at a certain price, and in individual supply chain basis, things are probably better elsewhere, so they adjust rather quickly. So, elsewhere in the world, prices are adjusting downwards, and we are sort of stuck where we’ve been,” he explained.
He added that the Federal Government is keen on discussions over fuel pricing ahead of the next general elections, with the Ministry of Petroleum Resources leading talks involving the refiner, marketers and other industry stakeholders.
“The government is interested in that particular conversation because the government is heading for elections, and President Tinubu is determined that it’s not going to be in the front and center in the discussions at the polling station. So, that’s why the government is very keen.
“That’s why you can see that it is the Ministry of Petroleum that is organizing this. It’s not even the regulator. But right now, it is the Ministry of Petroleum that is organizing this conversation, I mean, a roundtable meeting, as it were, between the refiner, the government, as well as the petroleum retailers.”
Akinosho argued that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), rather than the Ministry of Petroleum Resources, should take the lead in addressing concerns over pump prices, saying the regulator should be allowed to exercise its statutory powers.
“I would have preferred that the Ministry wasn’t the one organizing this. I would have preferred a statement from the regulator, the NMDPRA, addressing the concerns about pump prices relative to global crude oil prices. I expected more of that. Let us see that the regulator actually has and exercises its regulatory powers, rather than seeing the State House bring people to the table. I don’t think this is a massive problem; it is something the regulator could have handled. We shouldn’t need to get to the point where the State House or the Ministry has to step in. I agree with you that we shouldn’t have profiteering and that we should be paying what is right, but I do not think that directive should come from the Federal Government. The law states that the Minister acts on the recommendations of the regulator, so we should simply let the NMDPRA do its work.”
He also said continued petrol imports remain necessary because the Dangote Refinery is not yet producing enough gasoline to meet domestic demand, stressing that pump prices should reflect actual market costs rather than a fixed target.
“We need to be very careful and work with data rather than just making claims without facts. The Dangote refinery is currently hamstrung because its RFCC (Residue Fluid Catalytic Cracking unit) is not working fully. Consequently, Dangote cannot produce the volume of gasoline required at this stage.
“That is precisely why it remains important for petrol retailers and distributors to import a certain amount of gasoline; Dangote is facing challenges meeting the full domestic demand. There has been an issue with the gasoline-producing unit of the Dangote refinery over the last two months, so it hasn’t been running at full capacity. That is the reality behind the continued importation.
“As for whether prices should drop below ₦800, we shouldn’t look at it as a fixed target. We should right-size the price so it reflects actual costs. The message needs to be clear: we are no longer controlling prices,” Akinosho said.
On what should drive fuel pump prices, the oil and gas expert said prices should be determined by actual market costs, including international crude oil prices and supply dynamics, rather than government directives or arbitrary price targets.
“The cost of crude oil is essentially what determines the price. Unlike other countries, we don’t heavily tax fuel at the pump. Instead, you factor in the freight, customs duties (if importing), and transportation costs. When you add those numbers up, they dictate the price.
“I agree that ₦1,200 or ₦1,250 is too high for this point in time. If those high numbers were based on crude trading at $80, $90, or close to $100 a barrel, then pump prices should absolutely drop now.
“However, I am not sure they should drop by the 30% some people are talking about, because international crude oil prices haven’t fallen by that much. Ultimately, as a guide for what the right price should be, it simply comes down to the cost of crude. It is as simple as that,” he concluded.
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