The Federal Government has cautioned petroleum marketers against using old stock purchased at higher prices as a reason for maintaining elevated petrol prices, insisting that consumers should benefit from the recent decline in supply costs.
The warning comes amid growing public concerns over the slow reduction in pump prices despite improvements in market conditions and adjustments in ex depot prices by local suppliers. Government officials stressed that pricing should reflect prevailing market realities rather than the cost of products acquired several weeks earlier.
According to the authorities, the deregulated downstream petroleum sector is expected to operate on the principles of transparency, competition, and fairness. Marketers were therefore urged to avoid practices that could undermine consumer confidence or create the impression of artificial price inflation.
Officials noted that the availability of locally refined petroleum products and increased competition among suppliers have improved fuel supply across the country. As a result, they argued that any reduction in wholesale prices should be passed on to consumers within a reasonable period instead of being delayed under the justification of clearing old inventory.
The government also warned that regulatory agencies would continue to monitor the downstream sector to ensure compliance with pricing regulations and fair business practices. While acknowledging that marketers are entitled to recover legitimate business costs, officials maintained that consumers should not be subjected to excessive prices that are inconsistent with current market conditions.
Industry analysts explained that under a deregulated market, pump prices are influenced by several factors, including the cost of crude oil, exchange rates, transportation, storage, distribution expenses, and competition among marketers. However, they noted that prolonged resistance to price adjustments after wholesale costs decline could weaken public confidence in the deregulation policy.
Consumer advocacy groups welcomed the government’s position, arguing that Nigerians expect the benefits of increased local refining capacity and improved fuel supply to translate into lower transportation and living costs. They called for greater transparency in fuel pricing and stronger oversight to discourage unfair market practices.
The development comes as Nigeria continues to implement reforms in the downstream petroleum sector aimed at encouraging private investment, improving fuel availability, and reducing dependence on imported refined products. The emergence of additional local refining capacity has intensified competition, creating expectations that market forces will increasingly determine pump prices.
Economic experts believe that a transparent and competitive fuel market is essential for sustaining investor confidence while protecting consumers. They argue that consistent pricing based on actual supply costs will promote healthy competition, improve efficiency, and strengthen the credibility of ongoing reforms.
As regulatory authorities intensify monitoring of the downstream sector, marketers are expected to align their pricing with prevailing market conditions. The government’s latest warning signals its determination to ensure that the gains from increased domestic refining and improved supply chains are reflected in pump prices, ultimately benefiting businesses, households, and the wider Nigerian economy.
SOURCE: PUNCH
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