PETROAN optimistic about lower fuel prices ahead

The Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, says the recent drop in global crude oil prices has sparked hopes of a corresponding reduction in petrol prices in Nigeria.

Dr. Billy Gillis-Harry, National President of PETROAN, while reacting to recent developments in the oil and gas sector, lauded the Federal Executive Council’s, FEC decision to continue the Naira-for-Crude policy.

Currently, global crude oil is trading between 61 and 63 dollars. Brent crude futures were down three cents, or 0.05 percent, at 63.30 dollars a barrel, while U.S. West Texas Intermediate crude futures were up two cents, or 0.03 percent, at 60.09 dollars.

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Both Brent and WTI are poised to register weekly declines of 3.5 percent and 3 percent, respectively, having both lost about 11 percent last week. At one point this week, Brent dipped below 60 dollars a barrel, marking its lowest level since February 2021.

However, Gillis-Harry explained that the core reason for the global crude oil price drop was the weakening global demand due to economic slowdowns in major economies.

This, coupled with increased production from non-OPEC countries, has led to a supply glut in the market.

“This expectation is based on the understanding that local refineries will be able to produce petroleum products at a lower cost, which will then be reflected in the prices charged to consumers,” he said.

Additionally, he noted that President Donald Trump’s recent policy of imposing reciprocal tariffs had contributed to the decline in crude oil prices by dampening global economic growth, further depressing oil prices.

“As the global crude oil price continues to fluctuate, PETROAN is optimistic that the Naira-for-crude policy will help to insulate the Nigerian economy from the volatility of the global market,” he added.

The Federal Executive Council had directed the full implementation of this policy, which was seen as a long-term strategy to support local refining and conserve foreign exchange reserves.

This policy involves selling crude oil to local refineries, like Dangote Refinery and others, in Naira instead of dollars, aiming to reduce Nigeria’s dependence on foreign exchange for petroleum products.

Gillis-Harry said that with the Naira-for-Crude policy in place, the benefits of lower global crude prices would be passed on to consumers, leading to more affordable fuel prices.

“By reducing the country’s dependence on foreign exchange and promoting local refining, the policy is expected to lead to greater stability in the downstream sector and more affordable fuel prices for consumers.

“With the Federal Executive Council’s directive to fully implement the policy, PETROAN is hopeful that the benefits of lower global crude prices will soon be felt by Nigerian consumers.”

The policy’s objectives include: boosting local refining capacity, enhancing domestic refining and investment in infrastructure, improving energy security, strengthening Nigeria’s energy independence, reducing reliance on foreign exchange, and stabilizing the foreign exchange market by decreasing dollar demand in domestic petroleum transactions.

Gillis-Harry also expressed gratitude to the Ministry of Petroleum Resources, agencies, and stakeholders for their efforts in championing roundtable talks aimed at ensuring petroleum product affordability and price stability in Nigeria.

NAN