Despite Hardship On Consumers, Encouraging Investment Matters Most – Lokpobiri Defends Fuel Deregulation

Despite Hardship On Consumers

 

 

OpenLife News reports that the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has admitted that the Federal Government’s downstream deregulation policy is putting pressure on consumers through high petrol prices, but insisted that encouraging private investment matters most for the long-term growth of the sector.

Lokpobiri stated this on Channels Television’s Politics Today on Tuesday while defending the removal of petrol subsidy amid rising cost of living and deepening poverty linked to the policy.

According to the minister, despite the pains, the average price of petrol in Nigeria remains lower than in the United States and some African countries.

“In the US, the average liter of fuel is N1,633. In Nigeria, it’s on the average of N1,430. If you go to Cameroon, it’s N1,959. If you go to Ghana, it’s N2,070. If you go to South Africa, it’s N2,070. So Nigeria’s average cost of fuel per litre is still lower than,” he said.

His defence comes as Dangote Petroleum Refinery and other marketers began a slight downward review of depot prices following a fall in international crude oil prices.

However,  Dangote has cut its depot price from N1,350 to N1,325 per litre, with marginal reductions in Lagos, Port Harcourt, Calabar and Warri.

Yet retail prices still hover between N1,370 and N1,450 per litre in many locations.

The poverty pressure

The high pump price has fed directly into Nigeria’s poverty crisis since subsidy removal in May 2023.

Data from the National Bureau of Statistics (NBS) and the World Bank shows the scale of the pressure:

-Headline inflation hit 34.8% in December 2024 largely driven by energy and transport costs after deregulation, before moderating to around 20-22% in mid-2025.

-The World Bank estimated in its 2023-2024 Nigeria Development Update that subsidy removal and exchange rate reforms pushed an additional 4 to 7 million Nigerians into poverty, raising the number of poor to over 104 million.

-NBS reports that over 56% of household spending now goes to food and transport, up from 43% pre-subsidy removal, leaving little for health and education.

-Small businesses and commercial drivers report over 60% increase in operating costs, forcing many to cut jobs.For many consumers, petrol at N1,430 per litre means spending over 40% of the N70,000 minimum wage just on 20 litres weekly.

Lokpobiri acknowledged the pressure is global, saying: “Oil and gas is a global commodity. What is sold in New York is what is also sold here… energy prices will always be the same. Consumers in the United States and Europe are also affected.”

Why investment matters most — Minister

Despite the hardship, the minister said government would not reverse deregulation because it has unlocked investments that were impossible under subsidy.“As at today, USA is the highest producer of oil and gas in the world…

They also have the highest refining capacity, but the fuel price per liter is higher than that of Nigeria. So despite the fact that Dangote Refinery is here, that doesn’t mean that the fuel price will be lower,” he argued.

He said: “But for the policy of deregulation, Dangote Refinery wouldn’t have been the most attractive IPO in the continent. If government was continuously importing, as NNPC was doing, and selling at a lower price than the market price, Dangote wouldn’t have been able to survive.”

According to him, deregulation is designed “to enable private sector businesses to thrive and all the businesses that are associated with the oil and gas sector.”

He cited gains including local supply of aviation fuel by Dangote Refinery, rising foreign reserves — with the Central Bank of Nigeria stating that 85% of Nigeria’s foreign reserves now comes from oil and gas — and a surge in FAAC allocations to N2.1 trillion, which he said has helped states that previously could not pay salaries to now execute projects.

“These days we get 2.1 trillion being shared. This is the first time it is happening. You’ll recall that before this government came, about 27 states had no capacity to pay even salaries. Today, states are doing gigantic projects. It’s because of the savings that we made from this subsidy,”

Lokpobiri said.He maintained that while the policy squeezes consumers in the short term, building a new economy driven by private refineries and midstream investments is the priority.