Market forces determine refined product prices under deregulation- Lokpobiri

The Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri, says deregulation has allowed market forces to determine the prices of refined petroleum products in Nigeria.

Lokpobiri, in an interview with newsmen on Monday in Abuja, said crude oil was an international commodity whose price was determined by global market forces, regardless of the volume produced by individual countries.

While reacting to the constant rise in fuel prices, the minister said market dynamics must be allowed to determine the prices of refined petroleum products, as was the practice in other parts of the world.

“Oil and gas is an international commodity. The price is known globally.

“The price in Nigeria is the same as the price in New York and London.

“Increasing Nigeria’s crude oil production will not necessarily reduce the prices of locally refined petroleum products under a deregulated market.

“That is the essence of deregulation. We decided to completely deregulate the downstream sector when this government came in,” Lokpobiri said.

He said the policy had also created an enabling environment for major investments in Nigeria’s refining sector, citing the Dangote Refinery as an example.

He, however, expressed optimism that Nigeria would increase its crude oil production to about three million barrels per day in the coming years.

The minister attributed the expected increase to growing investments and increased drilling activities in the country.

He said the number of active drilling rigs in Nigeria had risen from between 10 and 14 before the present administration to more than 65 currently.

“Today, we have over 65 rigs actively working in different fields in Nigeria. We are drilling new wells and making new discoveries,” he said.

Lokpobiri said the increased drilling activities were the result of government’s policies aimed at creating an enabling environment for investment in the oil and gas sector.