Nigerian motorists may see more affordable petrol prices once the country’s domestic refining industry becomes stronger, more competitive and financially sustainable, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said.
Key takeaways
- Petrol is currently selling at about N1,310 to N1,350 per litre in many parts of Nigeria.
- Prices rose from a previous range of N1,210 to N1,275 per litre over the past two weeks.
- Higher depot and gantry prices set by depot operators and Dangote Refinery contributed to the increase.
- The NMDPRA says petrol pricing is fully deregulated and exposed to market conditions.
- Domestic refining capacity, crude supply and shipping delays are among the factors driving price swings.
Domestic refining seen as route to lower prices
George Ene-Ita, the NMDPRA’s head of public affairs, said consumers could receive some relief when local refining operations expand and become more reliable. He made the comments in an interview as petrol and other petroleum products became more expensive across the country.
Retail petrol prices have climbed sharply in the last two weeks, moving from N1,210-N1,275 per litre to roughly N1,310-N1,350. The increase followed upward adjustments to ex-depot and gantry prices by depot owners and Dangote Refinery, raising costs further along the distribution chain.
Market factors behind petrol volatility
Ene-Ita said the authority’s position remains that petrol prices in Nigeria are entirely deregulated. Retail rates can therefore respond to developments across the supply chain rather than being fixed by the regulator.
He identified the strength of Nigeria’s refining base, the process of obtaining crude for use as refinery feedstock and the delay between buying crude offshore and delivering it to a refinery as important influences on price movements. Changes in any of these areas can affect the cost and availability of petrol in the domestic market.
He said consumers could begin to benefit when the local refining system becomes more developed, competitive and durable. At that stage, the pricing outlook should become more transparent and produce better outcomes for petrol buyers.
