Industry experts on Saturday, predicted a significant reduction in the price of Premium Motor Spirit (PMS), popularly known as petrol, in 2025, with prices potentially dropping below ₦500 per litre.
The current price of petrol ranges between ₦900 and ₦950 per litre across various fuel stations.
The anticipated price drop is attributed to a robust downstream sector driven by the Federal Government’s deregulation policy, stable foreign exchange rates, and increased domestic refining capacity.
Key Factors Driving Price Reduction
Increased Local Refining Capacity: The commencement of operations at the Port Harcourt and Warri refineries, alongside the Dangote Refinery, is expected to boost local production and reduce dependence on imports.
The Dangote Refinery currently injects seven million litres of petrol daily into the domestic market.
The Port Harcourt Refinery, which began operations over a month ago, produces 1.4 million litres of petrol daily.
The Warri Refinery, operating at 60% capacity, focuses on producing kerosene, diesel, and naphtha.
Deregulation of the Downstream Sector: The deregulation policy has introduced competition among producers, driving prices lower.
Industry experts, who spoke to Saturday Sun, noted that petrol, which currently sells for between ₦900 and ₦950 in many fuel stations, may have its price further crashing to as low as ₦500 a litre in the course of the year.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ukadike Chinedu, in an interview with Saturday Sun, said the entry of multiple players is already fostering healthy price competition.
He noted that the Federal Government’s policy of selling crude oil to refineries in exchange for payment in naira is expected to reduce inflation and ease foreign exchange pressures.
Chinedu highlighted the reduction in fuel prices by major players, including the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery, as evidence of the benefits of multiple production sources.
With improved market conditions, modular refineries, which currently produce only diesel, are planning to add petrol refining to their operations. There are 25 licensed modular refineries in Nigeria, five of which are currently in operation.
He said, “As you can see, NNPC has reduced its ex- depot price from ₦1, 045 per litre to ₦899 per litre for marketers, translating to ₦925 per litre at the pumps for the end users. This, I must say, is very commendable. These are not small drops, but massive drops from ₦1, 045 to ₦899 ex- depot is a lot of drop.”
On the other hand, he said the Dangote refinery equally implemented a similar ex-depot price slash from ₦970 to ₦899.50 per litre.
He pointed out that with the consistent availability of petroleum products, competition will set in and prices of petroleum products will drop further in the New Year.
The Publicity Secretary of Crude Oil Refiners Association of Nigeria (CORAN), Iche Idoko, while giving his take, said Nigerians would gradually begin to witness the gains, which is typical of a deregulated market.
He said, “Price drop is one of the characteristics of deregulation we had highlighted. As the industry settles in to the regime of full deregulation, we are bound to see competitions amongst players, which ultimately will benefit the consumers.”
According to him, these competitions will be around prices, product quality, and credit lines available to bulk buyers.