Petroleum minister says Nigeria’s deregulated downstream sector leaves petrol prices to global market forces, rejects Atiku’s proposed production subsidy.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said the Federal Government cannot directly determine the pump price of petrol because Nigeria’s downstream petroleum sector is fully deregulated.

Lokpobiri made the statement while responding to former Vice President Atiku Abubakar’s call for a production subsidy to make locally refined petrol more affordable for Nigerians.

According to the minister, petrol prices are largely influenced by global market forces because crude oil and refined petroleum products are traded in the international market.

He argued that any attempt by the Federal Government to arbitrarily reduce petrol prices would effectively amount to a return to the fuel subsidy regime.

“The Bola Tinubu government doesn’t have any power to reduce or increase the price of petrol. It is completely deregulated in line with global best standards,” Lokpobiri said.

The minister also rejected the argument that petrol refined locally should automatically be significantly cheaper than imported or internationally traded products.

He explained that domestically produced crude oil supplied to Nigerian refineries is priced at international market rates, meaning local refining does not necessarily translate into substantially lower pump prices.

Lokpobiri also dismissed Atiku’s proposed production subsidy, arguing that the proposal lacks the necessary legal, fiscal and financial basis.

He said, “There is no legal basis, there is no fiscal basis, there is no financial basis for production subsidy.”

The minister, however, maintained that Nigerians are already benefiting from increased domestic refining capacity, which he said has contributed to improved fuel availability and competitive pricing.

Lokpobiri also compared Nigeria’s petrol prices with those in other oil-producing countries, arguing that the pump price in Nigeria remains lower than in some countries despite the country’s transition away from fuel subsidies.

He cited the United States, noting that despite its substantial crude oil production and refining capacity, petrol is sold at prices above Nigeria’s average pump price.

The minister’s comments come amid continued debate over petrol pricing, domestic refining, crude supply to Nigerian refineries and the impact of the removal of fuel subsidies on consumers.

Atiku has advocated alternative measures to reduce the burden of petrol prices on Nigerians, while the Federal Government has maintained that market-based pricing is necessary under the deregulated downstream petroleum sector.