The federal government says it will not intervene to regulate petrol prices despite escalating geopolitical tensions in the Middle East that are causing volatility in global oil markets.
In an interview with Channels Television on Wednesday, Wale Edun said the government would instead introduce other initiatives to cushion the impact of the tensions.
Edun said that in response to the global developments, Bola Tinubu had already announced the provision of 100,000 additional compressed natural gas (CNG) conversion kits to enable vehicles to switch to CNG fuel, which costs about 25 to 30 percent of the price of petrol.
He said the government would pursue similar initiatives “rather than interfering with an orderly market pricing”.
“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,” Edun said.
“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 conflict in the Middle East has triggered volatility in global markets, with crude oil prices crossing $100 per barrel on March 9 — the highest level since July 2022 — before easing to $87 the following day.
On March 11, the finance ministry said the war in the region could affect Nigeria’s crude oil and gas prices, capital flows, financial markets, as well as global logistics and supply costs.
Following the spike in crude oil and ex-gantry petrol prices, pump prices at retail stations have surged, with transport fares doubling on some major routes across Nigeria.
Edun said price adjustments by private operators, particularly Dangote Refinery, reflect prevailing market conditions.
On Tuesday, the refinery reduced its ex-gantry petrol price to N1,075 per litre after implementing three earlier increases, although pump prices remain elevated.
Commenting on the development, the minister said the president had entrenched market-based pricing for petroleum products — a system that had long been absent — adding that the market does not move in only one direction.
“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,” he said.
“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.
“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.”
Edun said the resilience seen in Nigeria’s economy is largely due to private sector investment in refining, particularly by Aliko Dangote, president of Dangote Group.
He added that the country needs to support its refiners, as other nations do, to ensure a steady supply of petroleum products.
The African Democratic Congress (ADC) had earlier asked the government to introduce a “temporary and time-bound cap” on petrol prices to prevent further increases that could worsen the cost of living for Nigerians.