Sen. Lokpobiri Reaffirms FG’s Commitment To Downstream Deregulation, Says Market Forces Determine Petroleum Prices
The Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri, Ph.D., has reaffirmed the Federal Government’s commitment to the deregulation of Nigeria’s downstream petroleum sector, stressing that crude oil is a global commodity whose price is determined by international market dynamics.
The Minister stated this while appearing on Channels Television’s Politics Today, where he explained that movements in global crude oil prices inevitably have implications for petroleum product prices in countries operating within a deregulated market.
“Crude oil is a global commodity, and its pricing is global as well, determining the prices of petroleum products. This is not peculiar to Nigeria but the global reality in the energy industry, and it will not mean that we will roll back the policy on deregulation of the downstream sector,” he said.
A release by Nneamaka Okafor, Media and Communications aide to the Minister of State for Petroleum Resources (Oil), says, Sen. Lokpobiri also drew attention to Section 205 of the Petroleum Industry Act (PIA), which provides for the determination of petroleum product prices by market forces. He noted that government-imposed price fixing would be inconsistent with the provisions of the law.
“Section 205 of the PIA places petroleum products price determination on market forces. Any attempt at price fixing would amount to a violation of that section; hence, the call for price fixing is an aberration,” the Minister stated.
He further noted that, despite the operation of market forces, petroleum products in Nigeria remain relatively affordable compared with prices in neighbouring countries and in the United States and United Kingdom.
According to him, while current prices reflect the effects of prevailing geopolitical tensions and developments in the global oil market, Nigerians should also recognize the benefits of deregulation, particularly the sustained availability of petroleum products, in contrast to the recurrent scarcity experienced under the previous regime.
On domestic refining, the Minister said the Federal Government, through NNPC, remains committed to the rehabilitation of the nation’s refineries. He added that the Renewed Hope Administration has also removed bureaucratic bottlenecks surrounding refinery licensing, enabling new private refineries to come on stream.
He, however, stressed that increased refining capacity, while critical to domestic supply and competition, would not by itself insulate Nigeria from global crude oil price movements.
“More refining capacity will create competition, and competition will strengthen market forces that can ultimately influence prices in the interest of Nigerians,” he said.
Sen. Lokpobiri also highlighted the Administration’s investment-driven reforms, pointing to major commitments including the $550 million Ubeta project, $5 billion Bonga North development and Shell’s $2 billion HI development as evidence of renewed investor confidence in Nigeria’s oil and gas sector.