Since the removal of fuel subsidies in mid-2023, Nigerians have been experiencing the full impact of a deregulated petroleum market. The elimination of government subsidies, which previously kept petrol prices artificially low, has triggered intense price wars among oil marketers, with Nigerians now feeling the direct economic strain.
Rising Petrol Prices and Market Competition
Following subsidy removal, petrol prices have fluctuated significantly. The Nigerian National Petroleum Company Limited (NNPCL) recently adjusted pump prices, with petrol now selling at ₦990 per litre in Abuja and ₦960 per litre in Lagos. Other major marketers, including independent retailers, have followed suit, with pump prices varying across states based on transportation and supply logistics.
With full deregulation, the market has become more competitive, as seen in the recent price wars among oil marketers. According to a Bloomfield Energy report, intense competition is expected to force prices down, especially as local production capacity increases.
Dangote Refinery’s Impact on the Market
Dangote Refinery has emerged as a critical player in Nigeria’s fuel supply chain. Initially, NNPCL held exclusive rights to purchase refined petrol from the refinery, but this monopoly was recently lifted, allowing independent marketers to buy directly. This move is expected to foster competition and stabilise prices.
MRS, PETROAN, and Importation Challenges
The MRS deal and PETROAN’s advocacy for open competition have also influenced the market dynamics. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has called for a level playing field, arguing that both local refining and petrol importation should be encouraged. PETROAN’s President, Billy Gillis-Harry, stated:
“Everybody should be allowed to play in the market. Even importation should not be a crime because it is not a crime; the PIA makes provision for that.”
However, importers face challenges due to foreign exchange volatility, high freight costs, and market uncertainty, which have made petrol imports less attractive despite deregulation.
Legal Battles and Government Policies
The deregulation policy has also led to court cases between marketers and regulatory bodies. Some players have challenged government policies, particularly regarding pricing mechanisms and regulatory inconsistencies. While the Petroleum Industry Act (PIA) was designed to create a structured downstream sector, the implementation process has faced pushback from industry stakeholders.
The Real Cost to Nigerians
For ordinary Nigerians, fuel subsidy removal has led to increased transport costs, rising inflation, and higher costs of goods and services. While the government has promised to reinvest subsidy savings into education, healthcare, and infrastructure, many Nigerians are yet to see tangible benefits.
As the Nigeria navigates these changes, the dynamics between government policies, private sector competition, and local refining capacity will determine whether fuel prices stabilise or remain volatile. The question remains: will deregulation ultimately benefit Nigerians, or will the price wars continue to squeeze consumers?
