LAGOS, Nigeria – Nigeria’s petroleum sector is set for significant changes in 2025, with experts predicting a steep decline in petrol prices, potentially falling below ₦500 per litre.
This would mark a sharp drop from the current ₦900–₦950 per litre seen at many fuel stations, driven by increased local refining capacity, regulatory reforms, and market competition.
Refinery Resurgence Boosts Local Capacity
Key to the anticipated price drop is the resurgence of Nigeria’s local refining capabilities.
The Port Harcourt and Warri refineries, alongside the privately owned Dangote Refinery, are injecting much-needed supply into the market.
The Port Harcourt Refinery has ramped up production to 1.4 million litres of petrol daily, while the Warri Refinery has focused on producing kerosene and diesel.
Meanwhile, the Dangote Refinery, the largest single-train refinery in the world, has increased its domestic contribution to seven million litres of petrol daily.
These developments are expected to ease the country’s reliance on imports, which currently account for 79.5% of the 40 million litres consumed daily.
Deregulation Policy Sparks Competition
Nigeria’s deregulation of the downstream petroleum sector has been another game-changer.
This policy has ended monopolistic practices, enabling healthy competition among marketers, which is already driving down prices.
“The coming on stream of the Port Harcourt and Warri refineries is a game-changer for the downstream sector as it will promote a healthy price competition,” said Ukadike Chinedu, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN).
“Both the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery have reduced prices in the last three weeks, signalling the gains of multiple sources of production.”
Supporting Policies and Foreign Exchange Stability
The government’s naira-for-crude policy, which allows local refineries to purchase crude oil in the local currency, has also reduced the sector’s reliance on foreign exchange.
This, coupled with a stabilised naira-dollar exchange rate—now under ₦1,800 per dollar—has eased cost pressures and is expected to further lower petrol prices.
Modular refineries, initially focused on diesel production, are now preparing to refine petrol.
Their increased participation is expected to further enhance domestic capacity and competition, creating a more diversified and resilient market.
Stakeholders Optimistic About 2025
Industry stakeholders are optimistic about the potential for sustained price reductions.
Billy Harry, President of the Petroleum Products Retail Owners Association of Nigeria (PETROAN), noted, “Consistent availability and increased competition will lead to further price reductions. The possibility of affordable petrol for Nigerians is very feasible in 2025.”
Similarly, Iche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), emphasised the benefits of deregulation.
“As the industry settles into full deregulation, we are bound to see competition among players, which will ultimately benefit consumers,” he said.
Challenges Ahead
Despite the positive outlook, challenges remain.
Sustained investment is needed to rehabilitate existing refineries, and robust regulatory oversight is required to ensure product quality and prevent market exploitation.
Additionally, balancing import reliance while local production ramps up will be critical to maintaining market stability.
With increased local refining capacity, supportive policies, and growing market competition, 2025 could bring much-needed relief to Nigerian consumers.
Lower petrol prices are expected to alleviate inflationary pressures, boost economic stability, and highlight the benefits of a deregulated downstream sector, marking a significant step forward for Nigeria’s energy landscape.
