By Jimoh Ahmed
Petrol prices in Nigeria are projected to drop significantly in 2025, potentially falling below ₦500 per litre, as industry stakeholders attribute this to the ongoing impact of deregulation in the downstream oil sector.
Currently selling between ₦900 and ₦950 per litre, the anticipated price drop is driven by factors such as a stabilized foreign exchange policy, enhanced price competition, the naira-for-crude policy, and increased local refining capacity.
Refineries Driving the Change
Key players in this transformation include the Dangote Refinery and government-owned facilities in Port Harcourt and Warri, which are gradually increasing local production. The Port Harcourt Refinery currently produces 1.4 million litres of petrol daily, while the Warri Refinery operates at 60% capacity, focusing on diesel, kerosene, and naphtha.
The Nigerian National Petroleum Company Limited (NNPCL) has also implemented measures to support the local market. The Federal Executive Council’s approval for refineries to purchase crude in naira and the revival of modular refineries, which are expanding their product lines to include petrol, are expected to boost domestic production.
Market Competition and Foreign Exchange Stability
Industry players note that competition between NNPCL and private refiners, like Dangote Refinery, has already led to price reductions in recent weeks. For instance, NNPCL reduced its ex-depot price from ₦1,045 to ₦899, while Dangote Refinery followed with a similar drop.
The Federal Government’s stable foreign exchange policies have further bolstered this trend, with the dollar now trading at under ₦1,800. Experts suggest this will conserve foreign exchange by reducing the reliance on petrol imports, which currently account for 79.5% of the country’s demand.
Industry Optimism for 2025
Leaders in the petroleum sector, including the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Owners Association of Nigeria (PETROAN), express confidence in the prospects of deregulation. They emphasize that competition among refiners will drive prices down, benefiting consumers.
IPMAN’s National Publicity Secretary, Mr. Ukadike Chinedu, described the ongoing developments as a “game-changer” for the downstream sector, adding that the naira-for-crude policy will help stabilize the economy by reducing inflation and easing foreign exchange pressures.
Similarly, PETROAN President Billy Harry stated, “The consistent availability of petroleum products and the competition among refiners will ensure that Nigerians enjoy affordable fuel prices in 2025.”
The Future of Nigeria’s Downstream Sector
The rise of modular refineries, combined with the contributions of Dangote and NNPCL, highlights the benefits of deregulation. Mr. Iche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), affirmed that the deregulated market is maturing, and consumers will soon enjoy better prices, quality products, and additional incentives from refiners and marketers.
As local refineries ramp up production and market competition intensifies, Nigerians may finally see significant relief at the pumps, ushering in a new era of affordability in the petroleum sector.
