- Global Oil Prices Drop Sharply, High Local PMS Prices Trigger Heated Debate
- Experts, Consumers Demand Removal Of Rigid Price Template
- CPPE Highlights Impact Of Global Oil Price Surge On Nigeria’s Fuel Market
Nigerians are again staring at high petrol prices at the pumps even as international crude oil prices have sharply fallen.
TheMatrix Newspaper reports that just a few weeks ago, a brief crude oil surge of around 25% was cited by oil marketers, including Dangote Refinery, as justification to hike in Premium Motor Spirit (PMS) prices by up to 30%.
As at Monday, Dangote Refinery, Nigerian National Petroleum Company Limited (NNPC Ltd) and oil marketers have increased their pump prices a minimum of three times in quick succession citing rising crude prices and a rigid price template.
According to the price template, the price of petrol is sold at filling stations based on the sum of the landing cost, wholesale margin, and distribution margins.
Now, with crude prices plummeting, these same marketers have introduced a “price template”—a fixed framework that could keep fuel prices artificially high for three weeks to a month. Critics say this amounts to a blatant rip-off, exploiting consumers despite the favorable global market conditions.
TheMatrix Newspaper authoritatively gathered that oil prices began falling on Monday after US President Donald Trump warned Iran to not block a shipping route crucial to global energy supplies.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America twenty times harder than they have been hit thus far,” he said on Social media.
In late morning trade in Asia on Tuesday, Brent crude was 6% lower at $93.05 (£69.33) and Nymex Light Sweet was down 6.1% at $88.96.
Industry observers and consumer advocates argue there is no economic justification for delaying a price adjustment, as marketers are quick to increase prices but slow to adjust it downwards.
An ongoing debate on social media wonders why Nigeria has to pay more for fuel despite the falling crude price.
“Local crude. Local refinery. Local market. Yet international prices. That’s not economics, that’s organized exploitation” NPG with the handle @Oluwashina101 wrote on X.
“Fuel prices should reflect actual market conditions, not rigid templates that hurt Nigerians,” said a Lagos-based economist.
Consumers are demanding swift action from both marketers and government regulators to ensure that PMS prices return to fair levels without further delay because when global crude falls, local pump prices must fall too. Anything else is exploitation.
Explaining the reason for the rising fuel cost, the Centre for the Promotion of Private Enterprise (CPPE) warned that recent adjustments in petroleum product prices in Nigeria are a direct reflection of global oil market volatility, driven by escalating geopolitical tensions in the Middle East.
In its latest policy brief, CPPE noted that crude oil prices surged from about $65 per barrel to over $100 per barrel in recent weeks, representing a more than 50 percent increase. This sharp rise has pushed up the cost of refined petroleum products worldwide, including petrol, diesel, aviation fuel, and liquefied petroleum gas (LPG).
The brief explained that while the expansion of domestic refining capacity in Nigeria improves supply stability, it cannot completely insulate the country from global price fluctuations. Crude oil feedstock for refineries is priced using international benchmarks and denominated in U.S. dollars, meaning local refineries still procure crude at global market rates.
However, CPPE emphasized that domestic refining offers modest cost advantages through reduced freight and logistics expenses, while also strengthening Nigeria’s energy security. For decades, Nigeria relied heavily on imported petroleum products despite being a major crude producer, a paradox that exposed the country to supply chain risks and frequent fuel shortages.
The policy brief highlighted additional benefits of local refining, including major foreign exchange savings, stronger external reserves, and opportunities to export refined products. Nigeria previously spent between $10 billion and $15 billion annually on fuel imports, a burden that strained foreign reserves and exchange rate stability.
Beyond fuel supply, CPPE underscored the industrial linkages of refining, which provide feedstock for petrochemicals, fertilizers, plastics, pharmaceuticals, and other manufacturing sectors, thereby creating jobs and boosting economic growth.
Dr. Muda Yusuf, Chief Executive Officer of CPPE, stressed that sustaining investments in domestic refining requires supportive government policies. He urged authorities to ensure reliable crude supply arrangements, strengthen distribution infrastructure, introduce tariff protection, and promote export competitiveness.
“While domestic refining may not completely eliminate the effects of global oil price volatility, it significantly reduces supply risks, conserves foreign exchange, strengthens the balance of trade, and enhances national energy security,” Yusuf stated.
The CPPE concluded that domestic refining represents a strategic pillar for improving Nigeria’s economic resilience and long-term energy sustainability.
