Strong indications suggest that the price of Premium Motor Spirit (PMS), commonly known as petrol, could reduce to as low as N500 per litre by 2025, according to industry experts.

The Federal Government’s deregulation of the downstream petroleum sector has introduced healthy competition, eliminating monopolistic practices and creating room for price reductions. The reopening of Warri and Port Harcourt refineries and the operational capacity of the Dangote Refinery have significantly boosted local refining. Modular refineries are also being upgraded to produce petrol, increasing domestic output.

Another critical factor is the Federal Government’s naira-for-crude policy, which allows local refineries to purchase crude oil in naira instead of dollars. This reduces foreign exchange pressure, stabilizes the naira, and lowers production costs. Recent reductions in ex-depot prices by NNPC Limited and Dangote Refinery indicate the onset of competitive pricing. NNPC, for instance, reduced its price from N1,045 to N899 per litre, with expectations of further declines.

Ukadike Chinedu, the Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized that the reopening of refineries and the naira-for-crude policy will end monopoly practices and ensure that petrol prices drop below N500 per litre by 2025. Billy Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), added that consistent supply from the rehabilitated Port Harcourt and Warri refineries will significantly lower fuel prices. Iche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), also noted that deregulation promotes price competition, with refineries competing to offer better prices and quality.

Nigeria consumes approximately 40 million litres of petrol daily, with local production meeting only 20.5% of this demand. The rest is imported. However, increasing local production capacity is expected to drastically reduce reliance on imports.

By Damilola Adeleke | January 5, 2025