Why pump prices stay high despite cheap crude
At a packed press briefing in Abuja, PENGASSAN President Comrade Festus Osifo made it clear: Nigerians are being ripped off at the fuel pump. He pointed out that the world market price for crude oil has slid from about $80 a barrel to roughly $60‑65, yet the average retail price of Premium Motor Spirit (PMS) still hovers around N875‑N905 per litre. In his view, the cost should have trended down to somewhere between N700 and N750.
Osifo explained that under Nigeria’s deregulated downstream system, two factors dominate the final price – the international crude price and the exchange rate – together accounting for about 80 % of what drivers pay. He urged anyone to look up the PLAT (Platts) benchmark online, convert the quoted cost per cubic metre into litres, then into naira. The math, he says, shows a clear gap between market reality and what motorists are charged.
The union’s frustration stems from a perceived disconnect between the ministry‑run NMDPRA and the market players. "NMDPRA should not watch the suppliers of products exploit the citizenry on the pretence of deregulation," Osifa warned, urging the regulator to step up monitoring and stop letting marketers set arbitrary pump prices.
Industry heavyweight Aliko Dangote has entered the debate, claiming his refinery sells petrol at about N815‑N820 per litre – a figure he says is still far below what neighbours in West Africa pay. Even with that lower price, the union argues, most Nigerians are still paying well above the cost‑based range.
Calls for transparency and reform
To close the price gap, PENGASSAN is demanding that NMDPRA immediately publish detailed pricing templates. Such templates would lay out each cost component – from import duties and taxes to the exchange rate and the PLAT reference – making it harder for marketers to hide margin inflations.
- Publish pricing templates: A clear, publicly available spreadsheet that shows how each litre is priced.
- Align pump prices with global crude: Adjust retail rates whenever the Brent or WTI benchmarks shift significantly.
- Strengthen enforcement: Empower NMDPRA to penalise any firm that deviates from the template without justification.
- Address security issues: Tackle the rising attacks on pipelines and offshore facilities that drive up operational costs.
Security concerns are more than a side note. The union highlighted escalating attacks in the Niger Delta’s waterways, where militants target vessels and infrastructure. Those incidents push multinational oil companies toward divestment, even as the federal government rolls out cost‑saving incentives. Osifo warned that without a stable security environment, any effort to lower pump prices could be undermined by higher insurance premiums and reduced supply.
Meanwhile, the debate over deregulation continues to polarise policymakers. Supporters argue that a free market leads to competition and better services, while critics like PENGASSAN say it leaves room for price‑gouging when oversight is weak. The union’s stance is that deregulation should not translate into a free‑for‑all where consumers bear the brunt.
Inside the industry, some marketers claim that the cost structure is already thin, citing high taxes, import duties, and the volatile naira as reasons they cannot match the low price floor suggested by the union. They argue that any forced price cut could jeopardise supply chains and lead to fuel shortages, a scenario the country can ill‑afford given its already tight fuel logistics.
What’s clear is that the gap between international oil prices and local pump prices is now a political flashpoint. As PENGASSAN pushes for greater transparency, the next steps taken by NMDPRA – whether it rolls out the demanded templates or continues with the status quo – will determine whether Nigerians see a real drop at the pump or keep paying premium prices for a commodity that’s cheaper abroad.
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