More than two years after the removal of fuel subsidies, Nigerian consumers are still absorbing prices that show no clear path downward. Ogechi Morenikeji Nkwoji, Head of Economic Intelligence, Research and Regulation at the Major Energies Marketers Association of Nigeria, tells Petroleumprice.ng that the problem runs deeper than global oil markets and that fixing it will require infrastructure investment, genuine competition, and policy coordination that have so far remained incomplete.
Nigeria's downstream sector has been deregulated for over two years. Is the market actually working?
It is moving in the right direction, but it is not fully there yet. While pricing now reflects global market dynamics, it is still significantly shaped by local structural inefficiencies infrastructure and logistics gaps, uncertainty around import licences, and limited technical capacity. These are factors that push prices above what a truly efficient market would produce.
A genuinely competitive environment requires multiple credible supply sources importers with real capacity to store and distribute at scale, and more local refiners. As refining capacity expands and more players enter, competition on price, quality, and reliability will reduce costs and allow true market forces to function.
What are MEMAN members doing to reduce the impact of global price shocks on consumers?
MEMAN members are not insulated from global price shocks, particularly given ongoing geopolitical tensions in the Middle East. Government policy no longer shields consumers under the current deregulated framework, so the focus has shifted to reducing costs internally across the value chain.
Key efforts include deploying automation and digital tracking to minimise product losses, transitioning distribution fleets from diesel to CNG, and encouraging solar adoption at retail stations to cut generator-related expenses. These measures can not eliminate volatility, but they reduce the inefficiencies that compound it.
Is there a disconnect between what locally refined fuel costs and what consumers pay at the pump?
Yes, and it is driven by several compounding factors. Even locally refined products are exposed to exchange rate volatility because crude oil is dollar-denominated. Road-dependent logistics in the absence of functioning pipelines significantly inflate distribution costs. Multiple levies applied beyond the refinery gate widen the gap further.
Closing this disconnect requires a shift in priorities pipeline infrastructure over trucking, investment in loss prevention systems, and policies that accelerate additional refining and logistics capacity. These require upfront investment, but they are the only path to ensuring that the benefits of local refining reach the consumer.
Would MEMAN support a price stabilisation framework as a middle ground without returning to full subsidy?
At the IMF and World Bank meetings, Former Finance Minister Wale Edun stated that the government has no plans to return to full subsidy but would instead use targeted, temporary relief for the most vulnerable to help them through the cost-of-living spike. MEMAN supports that position. What the association supports is targeted relief for the most vulnerable, not a structural rollback of the gains made since deregulation. MEMAN will continue working with the government and other stakeholders for the availability, accessibility, and affordability of energy for Nigerian consumers.
Should Nigerians expect prices to come down, or is elevated pricing the new normal?
The new normal is one of fluid, cost-reflective pricing. Prices will rise and fall with global oil markets, exchange rates, and supply dynamics, and that is not a broken system. It is how transparent markets function. The mistake is expecting a return to cheap fuel.
What can change is how exposed Nigerians are to external shocks. Increased local refining capacity reduces freight and insurance costs. A strategic reserves policy smooths supply-driven price spikes. A properly structured competitive market framework can slow the pace of price movement without distorting it. None of these is a quick fix, but they are the right ones.
The focus must move away from expecting cheap fuel and toward building a resilient system one that reduces exposure to price shocks rather than simply enduring them.