EXPERTS HIGHLIGHT POSITIVE IMPACT OF DEREGULATION AND NAIRA-FOR-CRUDE POLICY
Fuel prices in Nigeria are projected to drop significantly in 2025, with Premium Motor Spirit (PMS), commonly known as petrol, potentially selling for as low as ₦500 per litre, industry experts have revealed.
Currently priced between ₦900 and ₦950 per litre at most fuel stations, the anticipated price reduction is attributed to key factors such as the federal government’s deregulation policy, a stable foreign exchange regime, price competition, and the introduction of the Naira-for-Crude policy.
Deregulation Driving Competition
Industry stakeholders noted that the deregulation of the downstream petroleum sector has fostered competition and efficiency. This development, combined with the operationalization of the Port Harcourt and Warri refineries, as well as the Dangote Refinery, is expected to increase local fuel production significantly.
According to the Independent Petroleum Marketers Association of Nigeria (IPMAN), the entry of these refineries into the market is already creating healthy competition. The National Publicity Secretary of IPMAN, Ukadike Chinedu, remarked that price reductions by the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Refinery in recent weeks signal a positive shift in the sector.
Local Production Boost
Nigeria currently consumes around 40 million litres of petrol daily. However, only 20.5% of this demand is met through local refining, with the remaining 79.5% relying on imports. The Dangote Refinery alone produces 30 million litres of petrol daily, injecting seven million litres into the domestic market, a figure expected to increase.
The recently operational 125,000 barrels-per-day Warri Refining and Petrochemical Company (WRPC) and the 60,000 barrels-per-day Port Harcourt Refinery have also contributed to local supply. Additionally, the ongoing rehabilitation of the 150,000 barrels-per-day Port Harcourt Refinery 2 and the Kaduna Refinery could further bolster capacity.
NAIRA-FOR-CRUDE POLICY
The federal government’s decision to sell crude oil to local refineries for payment in naira has been highlighted as a game-changer. This policy is expected to reduce inflation, conserve foreign exchange, and make fuel more affordable for consumers.
Modular Refineries and Price Stability
More modular refineries are now preparing to refine petrol alongside diesel, ensuring diverse sources of supply. This, coupled with a stable foreign exchange rate, could further stabilize prices. The dollar currently exchanges for less than ₦1,800, a development experts believe will ease foreign exchange pressures and reduce the cost of fuel imports.
EXPERTS OPTIMISTIC ABOUT 2025
The President of the Petroleum Products Retail Owners Association of Nigeria (PETROAN), Billy Harry, expressed optimism about the future of fuel prices. He noted that recent price cuts at depots, such as NNPCL’s reduction from ₦1,045 to ₦899 per litre and Dangote Refinery’s reduction to ₦899.50 per litre, indicate a positive trend.
Similarly, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), Iche Idoko, emphasized that deregulation is driving competition, which will ultimately benefit consumers through lower prices, improved product quality, and additional incentives.
As Nigeria’s downstream sector embraces full deregulation, stakeholders are confident that fuel prices will continue to decline, providing much-needed relief to consumers in 2025.