Why Petrol Prices in Nigeria Have Not Dropped Despite Crude Oil Falling to $70 Per Barrel

Why Petrol Prices in Nigeria Have Not Dropped Despite Crude Oil Falling to $70 Per Barrel

Global crude oil prices have fallen to around $70 per barrel, sparking renewed hopes among Nigerians that the price of petrol could soon become cheaper. However, despite the steady decline in international oil prices, motorists across the country are still paying between ₦1,200 and ₦1,300 per litre for Premium Motor Spirit (PMS), leaving many consumers frustrated.

The situation has intensified calls for fuel marketers to reduce pump prices, especially as the downstream petroleum sector now operates under a deregulated market system where global price movements are expected to influence local fuel costs.

Brent Crude Falls to $70 Per Barrel

On Thursday morning, Brent crude, the global benchmark for oil prices, slipped to $70 per barrel, down from about $71 recorded the previous day. The decline continues a broader downward trend driven by several global factors, including:

Slowing global economic demand for crude oil.

Reduced geopolitical tensions in key oil-producing regions.

Expectations of increased crude oil supply from major producers.

These developments have pushed international oil prices to one of their lowest levels in recent months.

Nigerians Ask: Why Is Petrol Still Expensive?

Since Nigeria adopted fuel market deregulation, many expected petrol prices to move in line with global crude oil prices.

Historically, fuel marketers have been quick to increase petrol prices whenever crude oil becomes more expensive. However, with crude now falling significantly, many Nigerians are questioning why the same speed has not been applied to reducing pump prices.

Currently, petrol is still being sold for:

Over ₦1,200 per litre in Lagos

Close to ₦1,300 per litre in many other states

For millions of Nigerians already struggling with high transportation and living costs, the delay in reducing fuel prices has become a major concern.

Federal Government Calls for Lower Fuel Prices

The Federal Government, through the Ministry of Petroleum and the Federal Competition and Consumer Protection Commission (FCCPC), has urged marketers to allow consumers benefit from the recent drop in crude oil prices.

The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, clarified that the commission does not directly regulate petrol prices in Nigeria's deregulated downstream sector.

According to him, the agency's responsibility is to ensure fair competition and protect consumers from exploitative market practices rather than fixing fuel prices.

Bello also questioned why marketers respond almost immediately whenever crude oil prices increase but appear reluctant to reduce prices when international oil prices decline.

He stressed that a truly competitive market should benefit consumers during both rising and falling price cycles.

Marketers Push Back

Fuel marketers have rejected suggestions that they should be compelled to reduce pump prices immediately.

Some marketers have also opposed threats of sanctions over pricing decisions, warning that excessive government interference could trigger industrial action within the downstream petroleum sector.

The disagreement highlights the ongoing debate over how deregulation should function in Nigeria and whether market forces alone should determine petrol prices.

Will Petrol Prices Drop Soon?

Industry analysts believe that if global crude oil prices remain around the $70 per barrel level for an extended period and exchange rate conditions remain relatively stable, marketers may eventually adjust petrol prices downward.

However, several other factors continue to influence the final pump price Nigerians pay, including:

Foreign exchange rates

Importation costs

Distribution and transportation expenses

Depot pricing

Market competition among fuel marketers

As a result, a decline in crude oil prices does not always translate into an immediate reduction in petrol prices.

What Nigerians Should Expect

With Brent crude continuing its downward trend, pressure is mounting on petroleum marketers to pass the benefits on to consumers.

Many Nigerians will be watching closely over the coming days to see whether fuel prices finally begin to reflect the changing realities in the global oil market.

Until then, motorists and businesses remain burdened by some of the highest petrol prices recorded since the full deregulation of Nigeria's downstream petroleum sector.

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