FG Speaks On Introducing Petrol Price Cap

FG Speaks On Introducing Petrol Price Cap
Government promoting compressed natural gas as cheaper alternative to petrol for motorists.
ADC called for temporary petrol price cap to protect Nigerian consumers.

The Federal Government has said it will not introduce price controls on petrol despite rising volatility in the global oil market triggered by escalating geopolitical tensions in the Middle East.

The Minister of Finance, Wale Edun, disclosed this during an interview on Channels Television on Wednesday. He said the government would instead focus on measures aimed at cushioning the effect of rising energy costs on Nigerians.

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EKO HOT BLOG reports that Edun explained that the administration of Bola Tinubu would prioritise alternative energy initiatives rather than interfere in the market based pricing system for petroleum products.

According to him, the government has already approved the distribution of 100,000 additional compressed natural gas conversion kits to encourage motorists to switch from petrol to CNG.

He noted that compressed natural gas is significantly cheaper than petrol, costing about 25 to 30 per cent of the price of petrol, making it a more affordable option for vehicle owners.

Edun said, “When there is market failure is where the regulator steps in. But in terms of balancing pricing, what we are looking to do is to manage the disruption and we don’t know how permanent or temporary it could be.

“But in the meantime, rather than reverting back and taking backward steps, we’ll look at every other measure that we have that can help the cost of living of Nigerians.”

The comments come amid rising tensions in the Middle East, which have caused instability in global oil markets.

Crude oil prices surged above $100 per barrel on March 9, the highest level since July 2022, before dropping to about $87 the following day.

The Ministry of Finance had earlier warned that the conflict could affect Nigeria’s crude oil and gas prices, capital flows, financial markets, and global supply chains.

Rising crude oil prices and higher ex gantry petrol costs have already pushed pump prices upward across Nigeria, increasing transportation fares on several major routes.

Edun said price adjustments by private sector operators reflect market realities under the government’s liberalised fuel pricing framework.

He cited recent price movements by the Dangote Refinery, which on Tuesday reduced its ex gantry petrol price to N1,075 per litre after implementing three earlier increases.

Despite the reduction, retail pump prices at filling stations remain elevated.

Edun said, “Dangote reduced their price from, I think, around N1,200 to now just over N1,000 to N1,050, and that’s the dynamics of the market.

“But I think we should be thankful at this time for the capacity we have in Nigeria to refine crude into petrochemicals and petroleum products.”

The minister added that Nigeria’s growing resilience in the energy sector is largely driven by increased local refining capacity, particularly through private sector investments.

He specifically acknowledged the role of Aliko Dangote, president of the Dangote Group, whose refinery has begun supplying petroleum products locally.

Edun stressed that supporting domestic refiners is critical to ensuring steady fuel supply in the country.

“America is just now rushing to open another refinery. Pakistan, Thailand, in the absence of that capacity, they’re almost closing down their economies and societies, schools, and sending people home,” he said.

Meanwhile, the African Democratic Congress has urged the Federal Government to introduce a temporary cap on petrol prices to protect consumers from further increases.