Despite the instability in international oil markets brought on by growing geopolitical tensions in the Middle East, the Federal Government has stated that it will not step in to control gas prices.
In an interview with Channels Television on Wednesday, Wale Edun, the Minister of Finance, said that the government would instead implement policies to lessen the impact of growing energy prices on Nigerians.
Edun stated that instead of meddling in the market-driven price of petroleum goods, the government will take steps like increasing the usage of compressed natural gas for automobiles.
He claims that 100,000 more compressed natural gas conversion kits have already been approved by President Bola Tinubu to assist drivers in making the move from gasoline to CNG.
He clarified that CNG is a more economical option because it only costs 25 to 30 percent of the price of gasoline.
“The regulator steps in when there is market failure,” Edun stated. However, we are trying to manage the interruption in terms of price balance, and we are unsure of how long-term or short-term that might be.
“But in the interim, we’ll look at every other measure that we have that can help the cost of living for Nigerians, rather than going back and taking backward steps.”
Global oil markets are significantly unstable as a result of the Middle East situation.
On March 9, crude oil prices reached their highest point since July 2022—above $100 per barrel—before falling to $87 the next day.
Nigeria’s crude oil and gas prices, money flows, financial markets, and international logistics and supply costs might all be impacted by the violence, the Ministry of Finance has previously warned.
Pump prices have increased nationwide as a result of the surge in crude oil prices and rising ex-gantry gas prices.
Transportation prices have increased as a result; on some important routes, fares have allegedly doubled.
According to Edun, the Dangote refinery and other private sector companies have adjusted prices to reflect current market conditions.
Following three previous price rises, the Dangote refinery lowered its ex-gantry petrol price to N1,075 per litre on Tuesday.
Filling station pump costs are still high despite the decrease.
In response to the development, Edun stated that under the government’s market-based pricing policy, the swings were a typical aspect of market dynamics.
“Dangote lowered their price from, I believe, around N1,200 to now just over N1,000 to N1,050, and that’s the dynamics of the market,” he stated.
“However, I believe we should be grateful right now for Nigeria’s ability to refine crude into petrochemicals and petroleum products.”
According to the minister, enhanced local refining capacity, especially through private sector investments, is a major factor in Nigeria’s present energy sector resilience.
In particular, he recognized the contribution of Aliko Dangote, President of the Dangote Group, whose refinery has started to supply petroleum products locally.
In order to guarantee a consistent supply of petroleum products, Edun continued, Nigeria must assist its own refiners.
America is in a hurry to build another refinery right now. Without such capacity, Pakistan and Thailand are practically shutting down their economies, society, schools, and sending people home,” he stated.
In the meantime, the African Democratic Congress has called on the Federal Government to impose a temporary cap on gas prices in order to stop future hikes that would make Nigerians’ cost of living worse.
The party recommended that the cap be time-bound and intended to safeguard consumers in light of the current uncertainty surrounding global energy.
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