Petrol cheaper in Nigeria than US, many African countries — Lokpobiri + Video
by Moronfolu Adeyemi · The Eagle OnlineThe Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said the average price of petrol in Nigeria remains lower than in the United States and several African countries despite the removal of subsidy.
Lokpobiri stated this on Channels Television’s Politics Today on Tuesday while defending the Federal Government’s deregulation of the downstream petroleum sector amid concerns over rising petrol prices.
His comments came amid reductions in depot prices by the Dangote Petroleum Refinery and other marketers following a decline in international crude oil prices.
Dangote Refinery reduced its petrol depot price from N1,350 to N1,325 per litre, while other marketers also cut prices in Lagos, Port Harcourt, Calabar and Warri.
Despite the reductions, petrol was still selling between N1,370 and N1,450 per litre in some locations.
Defending the government’s position, Lokpobiri said petrol in Nigeria was cheaper than in the United States, Cameroon, Ghana and South Africa.
The minister said: “In the US, the average, you know, liter of fuel is N1,633. In Nigeria, it’s on the average of N1,430. If you go to Cameroon, it’s N1,959.
“If you go to Ghana, it’s N2,070. If you go to South Africa, it’s N2,070. So Nigeria’s average cost of fuel per litre is still lower than.”
Lokpobiri argued that Nigeria’s status as an oil-producing nation and the presence of the Dangote Refinery did not automatically translate into cheaper petrol.
He said: “As at today, the records available show that USA is the highest producer of oil and gas in the world.
“The United States is the highest producer of oil and gas in the entire world. They also have the highest refining capacity, but the fuel price per liter is higher than that of Nigeria.
“So despite the fact that Dangote Refinery is here, that doesn’t mean that the fuel price will be lower because Dangote Refinery is available.
“But what is important is that the regulation has also created a new economy.”
The minister said deregulation had encouraged private investment in the oil and gas sector, arguing that the Dangote Refinery would not have been able to survive if the government had continued importing petrol and selling it below the market price.
Lokpobiri said: “But for the policy of deregulation, Dangote Refinery wouldn’t have been the most attractive IPO in the continent.
“If government was continuously importing, as NNPC was doing, and selling at a lower price than the market price, Dangote wouldn’t have been able to survive.”
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He said the policy was designed to create opportunities for private-sector businesses across the midstream and downstream oil sectors.
The minister said: “Deregulation all over the world is to enable private sector businesses to thrive and all the businesses that are associated with with the oil and gas sector.”
Lokpobiri also defended the removal of petrol subsidy, saying the savings were being shared among the three tiers of government through the Federation Account Allocation Committee.
He said: “These days we get 2.1 trillion being shared. This is the first time it is happening. You’ll recall that before this government came, about 27 states had no capacity to pay even salaries.
“Today, states are doing gigantic projects. It’s because of the savings that we made from this subsidy.”
The minister said high energy prices were not peculiar to Nigeria, noting that consumers in the United States and Europe were also affected.
Lokpobiri said: “Oil and gas is a global commodity.
“What is sold in New York is what is also sold here.
“So, no matter what you may think, America, or Saudi Arabia, or anywhere in the world, energy prices will always be the same.”
He said the Federal Government would not reverse the deregulation policy despite pressure from consumers, maintaining that the measure was necessary to encourage investment in the sector.
Lokpobiri also cited the Dangote Refinery’s supply of aviation fuel and rising foreign reserves as evidence of gains from the oil and gas sector.
He further said the Central Bank of Nigeria had recently stated that 85 per cent of Nigeria’s foreign reserves came from the oil and gas sector.
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