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| Heineken Lokpobiri, minister of state for petroleum resources |
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has cautioned Nigerians against expecting an automatic crash in petrol pump prices solely due to local refining by the Dangote Petroleum Refinery, clarifying that global market dynamics remain the ultimate pricing determinant.
Speaking during a television appearance, Lokpobiri addressed widespread public expectations that domestic production would drastically lower fuel costs across the country. He clarified that while local refining improves national fuel security and availability, it does not exempt domestic products from international pricing benchmarks.
Addressing concerns surrounding full downstream sector deregulation, the minister emphasized that President Bola Tinubu’s administration no longer possesses the legal or administrative authority to fix or dictate petrol prices. He explained that crude oil—whether sourced locally or internationally—is purchased at international market rates, which directly influences the final pump price regardless of where processing occurs.
"Crude oil and refined products are part of a global market," Lokpobiri noted, adding that attempting to artificially slash petrol prices below market parity would require returning to the financially unsustainable fuel subsidy regime. He reiterated that under a fully deregulated framework, local refineries like Dangote must cover operational, capital, and raw material costs tied to global valuations.
Responding to calls from political figures proposing production subsidies to force down prices, Lokpobiri dismissed the proposals as lacking financial and fiscal practicality. He noted that even major oil-producing nations with extensive refining capacities maintain pump prices aligned with international market conditions.
Despite these global cost pressures, the minister maintained that Nigerians are already reaping the strategic advantages of local refining. He pointed to improved supply chain stability, reduced foreign exchange pressure from fuel importation, and increased competitive pressure among local depots as key structural gains.
Lokpobiri concluded by reassuring the public that full deregulation fosters an attractive environment for private investment and long-term sustainability, ultimately protecting the downstream sector from product scarcity and market collapse.