Energy Security: ‘Prices of petrol, diesel, LPG will continue to fall,’ says NMDPRA

*Saidu Mohammed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, attributes the expected price reductions to increasing supply, increased competition, and sustained private-sector investments with additional $50 billion capital in the oil and gas sector of the economy

Isola Moses | ConsumerConnect

Amid the current surging competition among the players in the downstream petroleum sector, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said the prices of the Premium Motor Spirit (PMS), also known as petrol, diesel, and Liquefied Petroleum Gas (LPG) will continue to decline across the West African country.

ConsumerConnect reports Mr. Saidu Mohammed, Chief Executive Officer (CEO) if NMDPRA, said this at the weekend in Ogbele Community, Ahoada East Local Government Area (LGA) of Rivers State.

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He affirmed this development during the inspection of facilities belonging to Aradel Holdings Plc.

Mohammed also attributed his statement to the expected price reduction to rising supply, increased competition, and sustained private-sector investment in the oil and gas sector.

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He urged the private sector of the economy to invest between $30 billion and $50 billion in the midstream petroleum sector for further development of the industry.

Stating the expected reduction in energy prices, the NMDPRA Chief said Nigerians were gradually moving towards affordable energy as improved supply continues to drive price stability.

Mohammed further stated: “The more supply we have, the lower the price.

“This is already evident as petrol has dropped from about N1,000 to N800 per litre due to competition.”

State of affairs in petroleum industry, by Mohammed

Highlighting recent developments in the petroleum sector, Mohamned explained that President Bola Ahmed Tinubu administration’s removal of fuel subsidy since May 2023 has allowed market forces to function properly, leading to efficiency across the downstream sector.

“Sustained competition, rather than subsidies, will guaranty adequate supply of petrol and gas at affordable prices for Nigerians,” Mohammed said.

According to him, there is a need for additional refineries with advanced conversion capacity to produce diesel, fuel oil, naphtha, LPG, and petrol.

The NMDPRA Chief Executive disclosed that Nigeria’s ambition extended beyond local consumption to exporting petroleum products to Africa, Europe, and the Americas.

He averred: “However, domestic demand must first be adequately met by local operators before large-scale exports can commence.”

Mohammed as well declared President Tinubu strongly supported a free-market economy, recalling that subsidy removal was the President’s first major policy decision.

The policy, Mohammed noted, unlocked private sector participation and stimulated investments across the oil and gas value chain.

On condition of state-owned oil refineries

Highlighting the current condition of the four state-owned refineries, Mohammed said their operational conditions largely remained the responsibility of the Nigerian National Petroleum Company Limited (NNPCL).

According to NMDPRA, the agency was engaging with the NNPCL to ensure the delivery of crude oil and petroleum products to the Port Harcourt and Warri refineries reserves.

Mohammed explained: “Delivery of products to the reserves and restoring loading activities at the refineries will boost local economies and revive product distribution within host communities.

“Once product loading resumes, Nigerians will begin to feel the economic impact, even before full refinery operations.”

Nigeria’s economic growth depended heavily on the rapid expansion of locally owned midstream assets, stated he.

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Urging the private sector to pump between $30 billion and $50 billion into the midstream petroleum sector, Mohammed said: “I said it two days ago that the midstream sector alone will require about $30 billion to $50 billion investment.

“Those investments can only come from the private sector, not the government anymore.”

Mohammed also said: “So, as an authority, as a regulator, what we will do is to make sure that we lay down the desired enablers for them to operate and attract the investment that Nigeria needs.

“But first of all, we have to improve how we do things and the improvement can be seen here in a world-class facility being operated by Nigerians. That is the way to go.”

The NMDPRA Chief added that the Federal Government agency was impressed to see fully-integrated facilities designed, built, operated, and fully-funded by Nigerians.

The facilities inspected during his three-day operational tour across Rivers State, he affirmed, demonstrated that Nigerians had the capacity to design, finance, build, and sustainably operate world-class energy infrastructure.

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