NMDPRA: Why Petrol Prices Didn’t Hit ₦2,000 In Nigeria
A Narrow Escape from a Fuel Price Crisis
NIGERIA may have narrowly avoided a severe fuel price crisis, with petrol prices potentially exceeding ₦2,000 per litre, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The Authority’s Chief Executive, Engr. Saidu Mohammed, attributed this to the emergence of local refining capacity, which has reduced the country’s vulnerability to global oil price shocks.
His remarks come against the backdrop of ongoing geopolitical tensions affecting global energy markets, particularly in the Middle East.
Local Refining as a Strategic Buffer
Mohammed emphasised that domestic refining has become a critical stabilising factor in Nigeria’s deregulated fuel market.
In a system where prices are determined by market forces, the availability of locally refined products helps cushion the impact of external price fluctuations.
“Without local refining, the situation would have been completely different,” he noted.
Challenges of Import Dependence
For years, Nigeria relied heavily on imported petroleum products, a model that placed enormous pressure on foreign exchange and exposed the economy to global price volatility.
Mohammed described this phase as detrimental, noting that it weakened the country’s economic resilience and contributed to industrial decline.
He warned that continued dependence on imports could undermine efforts to rebuild the refining sector.
Learning from Past Industrial Decline
Drawing lessons from Nigeria’s textile industry, the NMDPRA chief stressed the importance of protecting local production.
“The textile sector collapsed because we failed to support it against imports. We must not repeat that mistake in the refining sector,” he cautioned.
Strengthening the Domestic Value Chain
Efforts are now underway to prioritise crude oil supply to local refineries, even as global demand for Nigerian crude remains strong.
Mohammed revealed that discussions with key industry stakeholders are focused on increasing the share of crude allocated to domestic processors.
“If we want stable fuel prices, we must ensure that our refineries have adequate feedstock,” he said.
Limits of Government Intervention
Despite public calls for price reductions, Mohammed explained that the government’s options are limited in a deregulated market.
He clarified that petrol pricing does not currently include taxes that could be removed to lower costs.
Instead, he argued that long-term stability depends on improving local refining capacity and supply chains.
Foreign Exchange Relief and Economic Stability
The shift toward domestic refining has also helped reduce demand for foreign exchange, easing pressure on the naira.
Mohammed noted that fuel importation had previously been a major drain on the country’s reserves, contributing to currency instability.
Conclusion: Building a Resilient Energy Future
Nigeria’s gradual transition toward local refining represents a significant shift in its energy policy.
While challenges remain, stakeholders believe that strengthening domestic capacity will be key to ensuring energy security, stabilising prices, and supporting economic growth.
As the country navigates global uncertainties, the focus on self-reliance may prove to be a decisive factor in shaping its energy future.
