Abstract

This study examined the effects of petroleum pricing strategies on price stability, equity, efficiency, and competitiveness in Nigeria’s deregulated petroleum market. Specifically, it investigated the impacts of market-based pricing, cost-plus pricing, and hybrid/banded-pricing strategies. A descriptive survey design was employed using a structured questionnaire titled Petroleum Pricing Strategies and Deregulated Market Questionnaire (PPSDMQ) administered to a sample of 390 respondents drawn from key stakeholders, including consumers, regulators, and marketers. Data were analyzed using multiple regression, one-way ANOVA, and Chi-Square test of independence to test the formulated hypotheses. The regression analysis for Hypothesis 1 revealed a strong relationship between market-based pricing and price stability, with an R-value of 0.732, significantly higher than the critical value, indicating that market-driven pricing significantly influences inflationary trends in Nigeria. Hypothesis 2 tested with ANOVA showed that the cost-plus pricing strategy significantly promotes equity in distribution and consumption, as reflected in the significant F-statistic compared to the critical threshold. For Hypothesis 3, the Chi-Square test established that hybrid/banded-pricing has a significant effect on efficiency and competitiveness, with χ² (42.67) far exceeding the critical value of 9.49. The study concludes that petroleum pricing strategies significantly shape the dynamics of Nigeria’s petroleum market, influencing stability, fairness, and competitiveness. It recommends that government and regulators adopt a hybrid pricing framework with transparent cost-plus elements, complemented by strong regulatory oversight, social safety nets for vulnerable groups, and long-term investment in refining capacity to reduce external dependence.