The Federal Government of Nigeria says it will not step in to regulate petrol prices despite rising geopolitical tensions in the Middle East that are causing volatility in global oil markets.
Speaking in an interview with Channels Television on Wednesday, Wale Edun, the minister of finance, said the government intends to roll out alternative measures to ease the effects of the conflict involving the United States, Israel and Iran.
Edun noted that in response to the global developments, Bola Tinubu had already announced the provision of 100,000 additional compressed natural gas (CNG) conversion kits to enable vehicles switch to CNG, which costs about 25 to 30 percent of petrol.
He added that the government would pursue similar measures “rather than interfering with an orderly market pricing”.
“When there is market failure is where the regulator steps in. But in terms of balancing pricing, what we are looking to do is to manage the disruption and we don’t know how permanent or temporary it could be,” Edun said.
“But in the meantime, rather than reverting back and taking backward steps, we’ll look at every other measure that we have that can help the cost of living of Nigerians.”
The Middle East conflict has created sharp volatility in global markets, with crude oil prices crossing $100 per barrel on March 9 — the highest level since July 2022 — before dropping to $87 the next day.
On March 11, the finance ministry said the war in the Middle East could affect Nigeria’s crude oil and gas prices, capital flows into financial markets, as well as global logistics and supply costs.
Following the increase in crude oil and ex-gantry petrol prices, pump prices at retail stations have surged, leading to transport fares doubling on some major routes across Nigeria.
‘refineries’ pricing driven by market forces’
Edun said petrol price adjustments by private operators, particularly the Dangote Refinery, reflect prevailing market conditions.
On Tuesday, the refinery reduced its ex-gantry petrol price to N1,075 per litre after implementing three earlier increases, although pump prices remain high.
Reacting to the development, the minister said the president has established a market-based pricing system for petroleum products — something that had long been absent — adding that the market does not move in only one direction.
“Dangote reduced their price from, I think, around N1,200 to now just over N1,000 to N1,050, and that’s the dynamics of the market,” he said.
“But I think we should be thankful at this time for the capacity we have in Nigeria to refine crude into petrochemicals and petroleum products.
“America is just now rushing to open another refinery. Pakistan, Thailand, in the absence of that capacity, they’re almost closing down their economies and societies, schools, and sending people home.”
Edun added that the resilience being observed in the Nigerian economy is largely due to private sector investment in refining, particularly by Aliko Dangote, president of Dangote Group.
He stressed that Nigeria must support its refiners at this time, similar to how other countries support theirs, to guarantee a stable supply of petroleum products.
The African Democratic Congress (ADC) had earlier urged the federal government to introduce a “temporary and time-bound cap” on petrol prices to prevent further increases that could worsen the cost of living for Nigerians.