TThe Director of Media and Communications at Manifold Media Limited, David Lawal, has attributed the recent reduction in petrol prices across parts of Nigeria to increased competition in the downstream petroleum sector, improved domestic refining capacity and relatively stable international crude oil prices.
Lawal made the remarks during the Ask the Expert segment of Trade FM’s Breakfast Business Briefing, where he examined the factors behind the latest adjustment in fuel prices and assessed its implications for consumers, businesses and the broader economy.
The Nigerian National Petroleum Company Limited (NNPC) recently reduced the pump price of Premium Motor Spirit (PMS), also known as petrol, by up to ₦35 per litre in Lagos and ₦15 per litre in Abuja, with several independent marketers following suit.
According to Lawal, the price reduction is largely the result of growing competition among major industry players, particularly the NNPC, Dangote Refinery and independent marketers.
He explained that the commencement of large-scale local refining by the Dangote Refinery has significantly increased domestic fuel supply, reduced Nigeria’s dependence on imported petroleum products and introduced healthy competition capable of driving prices downward.
Lawal also identified the relative stability of international crude oil prices as another contributing factor, noting that global market conditions continue to influence local fuel pricing despite the deregulated nature of Nigeria’s downstream petroleum sector.
While describing the reduction in petrol prices as a positive development, he said the full benefits would only be realised if competition remains effective and all stakeholders operate within a transparent and well-regulated market.
He said lower fuel prices should ordinarily translate into reduced transportation costs, lower logistics expenses, cheaper production costs for businesses and, ultimately, a decline in the prices of goods and services.
However, he observed that many Nigerians are yet to experience these expected benefits, pointing out that transport fares and commodity prices have remained largely unchanged despite recent reductions at the pumps.
According to him, sustained price stability rather than temporary reductions is necessary before consumers begin to experience meaningful relief from the high cost of living.
Speaking on the response of petroleum marketers to falling prices, Lawal acknowledged that some operators may be slow to adjust their pump prices because they are still selling fuel purchased at higher costs.
He, however, maintained that once older inventories have been exhausted, marketers should align their prices with prevailing market realities, stressing that consumers deserve to benefit from reductions in wholesale fuel prices.
He said the increasing willingness of marketers such as MRS and other independent operators to adjust their prices demonstrates that competition within the downstream sector is gradually becoming more active.
Lawal further highlighted the growing influence of the Dangote Refinery on Nigeria’s fuel market, describing it as one of the most significant developments in the country’s downstream petroleum industry in recent years.
According to him, increased local refining has not only reduced dependence on imports but has also compelled other market players to become more competitive in their pricing strategies.
Commenting on the refinery’s recently introduced fuel delivery initiative, Lawal said the programme has the potential to reduce distribution costs and minimise regional price disparities by making fuel more accessible across different parts of the country.
He explained that lower transportation costs for petroleum products could help stabilise pump prices nationwide while reducing cases of artificial scarcity, particularly in remote areas where logistics costs have traditionally pushed prices higher.
Despite the expected benefits, he cautioned that greater reliance on road transportation for nationwide fuel distribution could increase pressure on Nigeria’s already congested highways.
Lawal noted that the country currently lacks sufficient rail infrastructure for efficient fuel movement, adding that expanding rail-based distribution would reduce the burden on road networks and improve overall logistics efficiency.
Addressing concerns over why reductions in petrol prices are not immediately reflected in transport fares and commodity prices, he explained that inflationary pressures and other economic variables often delay the transmission of lower fuel costs to consumers.
He said petrol remains central to virtually every economic activity in Nigeria, meaning sustained reductions in pump prices could eventually lower operating costs for businesses, improve profitability for micro, small and medium enterprises (MSMEs), reduce inflationary pressures and increase consumers’ disposable income.
On the role of regulators, Lawal called for stronger oversight to ensure marketers promptly reflect prevailing market prices at filling stations.
He said regulatory agencies must promote transparency in pricing, enforce compliance with competition rules and prevent practices that deny consumers the benefits of lower fuel costs.
While acknowledging that marketers who purchased fuel at higher prices should not be compelled to sell at significant losses, he insisted that prolonged price reductions should leave operators with no justification for maintaining inflated pump prices.
Lawal also warned that excessive price competition could create unintended consequences if not properly managed.
According to him, smaller marketers may struggle to remain profitable during aggressive price wars, increasing the risk of business closures, market concentration and supply disruptions.
He therefore advocated a balanced competitive environment where consumers benefit from lower prices without undermining the commercial sustainability of operators.
Looking ahead, Lawal said both further reductions and fresh increases in petrol prices remain possible under Nigeria’s deregulated pricing system.
He explained that future price movements would depend largely on international crude oil prices, exchange rate stability, domestic refining output and broader geopolitical developments affecting global oil markets.
He noted that stronger local refining capacity, a more stable naira and continued expansion by existing refineries could support further price reductions.
Conversely, he warned that a weaker exchange rate, disruptions in local refining activities or renewed increases in global crude oil prices could quickly reverse the current trend.
Lawal also pointed to geopolitical tensions and developments in the international oil market as external risks capable of influencing fuel prices in Nigeria.
On long-term reforms, the communications expert urged the Federal Government to prioritise the rehabilitation and efficient operation of state-owned refineries while encouraging additional private investment in refining.
He also called for greater investment in pipeline infrastructure, improved fuel storage facilities, enhanced port efficiency and stronger protection of critical oil infrastructure.
According to him, expanding the number of functional refineries and creating a truly competitive downstream market would improve fuel supply, strengthen energy security and reduce Nigeria’s vulnerability to external shocks.
Lawal concluded that the country’s downstream petroleum sector would achieve greater efficiency through market-driven competition supported by effective regulation, rather than a return to government-controlled fuel pricing.
