Nigeria's Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has stated that increased crude oil production in the country may not necessarily translate to lower petrol prices. According to Lokpobiri, the cost of refined petroleum products is largely determined by global market dynamics. This clarification was made when the Minister of Hydrocarbons of the Republic of Congo, Stev Onanga, and his delegation visited him in his Abuja office.
Lokpobiri's statement was in response to a question on whether Nigeria's plan to increase indigenous participation in oil production and raise crude output to about three million barrels per day would eventually reduce the amount Nigerians pay for petrol. The minister emphasized that oil and gas is an international commodity, with prices known globally, and that Nigeria's production levels may not affect the price of locally refined products.
The minister also noted that market dynamics are allowed to determine the prices of refined petroleum products in countries such as the United States and those in Europe. Nigeria's decision to deregulate the downstream sector was also aimed at allowing market forces to determine prices. Lokpobiri commended the Nigerian Content Development and Monitoring Board (NCDMB) for its role in implementing the country's local content policy.
Lokpobiri expressed Nigeria's willingness to share its experience with Congo, as the Central African country seeks to strengthen its own local content framework. African countries, he advised, must take greater responsibility for developing the continent's energy resources and solving its energy challenges. The Congolese minister, Onanga, stated that his delegation visited Nigeria to learn from the country's experience in developing local content in the oil and gas industry.
Onanga noted that Congo wants to improve indigenous participation in its own petroleum sector and believes Nigeria's experience could provide useful lessons. He described the visit as an opportunity for Congo to learn from Nigeria, which he referred to as the "big brother." The Congolese minister added that his country wants to develop its local content capacity in a way that would benefit both countries.
Global crude oil prices fell further yesterday, reigniting hopes for a reduction in Premium Motor Spirit (PMS) pump prices in Nigeria. Brent Crude and West Texas Intermediate (WTI) fell to $101.5 and $98 per barrel, respectively, at the time of reporting. This represents declines of 2.29 per cent and 2.37 per cent, respectively, compared to prices traded at the weekend.
Despite the decline in crude oil prices, petrol pump prices have remained high in Nigeria. Filling stations in Abuja dispense petrol at between N1,395 and N1,450 per litre, although some retail outlets reduced their pump prices at the weekend. Some Nigerian filling stations reduced their petrol prices amid competition in the downstream petroleum sector.
Key points
- Increased crude oil production may not lead to lower petrol prices in Nigeria.
- Nigeria is willing to share its experience in local content development with Congo.
- Global crude oil prices have declined, but petrol pump prices remain high in Nigeria.
