The recent drop in petrol prices has brought brief relief to consumers, but retailers and marketers say the reduction cannot be sustained and may worsen instability in the downstream sector.
Two weeks ago, pump prices in Abuja and Lagos fell to between N885 and N945 per litre after the federal government suspended its planned import duty on petrol and diesel. Dangote Refinery also lowered its ex depot price to N828 per litre, though it has since risen to N854.
Despite the reduction, industry associations say the prices do not reflect real market conditions.
PETROAN president Billy Gillis Harry said the current figures are “not in any way guided by fair market pricing,” arguing that the short term drop masks deeper structural problems. He warned that the market is being distorted and that many marketers may soon struggle to raise capital to buy products, creating risks of new shortages or price spikes.
He added that the sector is becoming overly dependent on one refinery. “Everybody is walking towards price volatility guided by Dangote,” he said, stressing the need for what he called right sizing and fair pricing.
IPMAN spokesperson Chinedu Ukadike said deregulation exists only in theory, noting that a deregulated system cannot function with only one major domestic supplier. With government refineries still inactive, he said prices will continue to fluctuate sharply because marketers have no alternative sources.
He argued that if public and modular refineries were operational, competition would stabilise the market and reduce vulnerability to sudden shifts.
Both associations say the current pricing environment represents what they describe as a false equilibrium that will collapse once cost pressures or supply constraints emerge.
They warn that artificially low prices threaten long term availability, that marketers could soon face funding challenges, and that true deregulation cannot exist without multiple refineries.
While the temporary price drop brings relief to Nigerians, industry players say lasting stability will require restoring public refineries, expanding refining capacity, and strengthening competition to prevent future scarcity or abrupt price increases.
