Enhanced Private Investment to Drive Down Pump Price of Petroleum Products
By Naija Enquirer Staff
Pump prices of petroleum products are expected to continue declining as enhanced private-sector participation in Nigeria’s mid and downstream petroleum sectors boosts supply, competition and operational efficiency. The forecast is based on calculations by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which stressed that prices of petrol, diesel and Liquefied Petroleum Gas (LPG) will keep falling nationwide. The Chief Executive of NMDPRA, Engr. Saidu Mohammed, made this known at the weekend in Ogbele community, Ahoada East Local Government Area of Rivers State, during an inspection tour of facilities owned by Aradel Holdings Plc. Mohammed attributed the expected price reductions to rising supply volumes, increased market competition and sustained private-sector investment across the oil and gas value chain. According to him, Nigerians are gradually moving towards more affordable energy as improved supply continues to stabilise prices. “The more supply we have, the lower the price, and this is already evident as petrol has dropped from about ₦1,000 to ₦800 per litre due to competition,” he said. He explained that the removal of fuel subsidy had allowed market forces to function properly, improving efficiency across the downstream sector. “Sustained competition, rather than subsidies, will guarantee adequate supply of petrol and gas at affordable prices for Nigerians,” Mohammed added. The NMDPRA boss stressed the need for additional refineries with advanced conversion capacity capable of producing diesel, fuel oil, naphtha, LPG and petrol. He said Nigeria’s ambition extended beyond domestic consumption to the export of petroleum products to Africa, Europe and the Americas. “However, domestic demand must first be adequately met by local operators before large-scale exports can commence,” he stated. Mohammed noted that President Bola Ahmed Tinubu strongly supports a free-market economy, recalling that subsidy removal was the president’s first major policy decision. According to him, the policy unlocked private-sector participation and stimulated investments across the oil and gas sector. On the state-owned refineries, Mohammed said their operational status largely remained the responsibility of the Nigerian National Petroleum Company Limited (NNPCL). He disclosed that NMDPRA was engaging NNPCL to ensure the delivery of crude oil and petroleum products to the Port Harcourt and Warri refineries’ reserves. “Delivery of products to the reserves and restoring loading activities at the refineries will boost local economies and revive product distribution within host communities. Once product loading resumes, Nigerians will begin to feel the economic impact, even before full refinery operations,” he said. Mohammed added that Nigeria’s economic growth depends heavily on the rapid expansion of locally owned midstream assets. He noted that facilities inspected during his three-day operational tour across Rivers State demonstrated that Nigerians possess the technical and financial capacity to design, build, finance and sustainably operate world-class energy infrastructure. He singled out Aradel Holdings Plc, saying the company had proven that Nigerians could efficiently operate a refinery sustainably without foreign operatorship. “Aradel has supplied gas to Nigeria Liquefied Natural Gas (NLNG) for about 13 years, alongside operating an 11,000-barrels-per-day refinery. The company also runs a virtual gas pipeline, producing compressed natural gas distributed across several parts of Nigeria,” he said. The NMDPRA chief urged further investments in refining capacity, noting that the Dangote Refinery alone could not meet domestic, continental and global demand. He assured investors that the authority would continue providing regulatory incentives to attract large-scale investments into the midstream sector. In his remarks, the Managing Director of Aradel Holdings, Adegbite Falade, commended NMDPRA for its regulatory support and confidence in indigenous operators. Falade said the company remained committed to expanding refining capacity, commercialising gas and eliminating routine gas flaring.
