Energy Expert Urges FG to Consider Temporary Return of Petrol Subsidy if Prices Hit N2,000/Litre
An energy expert has advised the federal government to consider reintroducing fuel subsidies as a temporary measure if global oil price volatility pushes petrol prices in Nigeria close to N2,000 per litre. The proposed subsidy is intended to cushion the effects of market disruptions and protect both consumers and the broader economy.
Call for Temporary Intervention
The recommendation was made by Joe Nwakwue, partner at Zera Advisory and Consulting, during a webinar organised by the Major Energies Marketers Association of Nigeria (MEMAN) on Tuesday. Nwakwue stressed that any subsidy reintroduction should be a short-term intervention aimed at mitigating the impact of global oil price fluctuations on Nigerians.
He explained that such a policy must be clearly defined, with a structured exit plan once global oil prices begin to decline. This approach would help ensure that the measure does not become a permanent fiscal burden while providing immediate relief during periods of extreme price volatility.
Strengthening Crude-for-Naira Policy
The energy expert also called for improvements to Nigeria's crude-for-naira initiative, noting that refining its framework could serve as a buffer against external shocks. He said enhancing this policy would help reduce the country's exposure to fluctuations in the international oil market, thereby promoting greater economic stability.
Nwakwue warned that reliance on a single refinery could create dominance risks, which must be mitigated through regulatory measures. He emphasized that allowing fuel imports remains critical to maintaining competition and preventing price distortions in the domestic market.
Need for Regulatory Strengthening
In addition, the expert stressed the importance of strengthening regulatory institutions in the oil and gas sector. He noted that effective oversight would ensure compliance with industry rules and promote stability in the downstream market, which is essential for both consumers and businesses operating in the energy space.
Global Crisis Highlights Need for Flexibility
Meanwhile, another stakeholder, the Chairman of MEMAN, Hubb Stokman, said recent volatility in the global oil market, triggered by the Middle East crisis, has reinforced the importance of flexible supply arrangements. Stokman explained that the crisis occurred shortly after the supply agreement was introduced, leading to rapid changes in global prices.
Despite this, he said the Nigerian market has remained stable so far, with the arrangement delivering positive results. However, he stressed the need for continuous adjustment in response to changing global conditions, warning against rigid market strategies that could exacerbate price shocks.
"I think that using the mechanism of the naira-for-crude, as I said, it's until I see the agreements; I wouldn't know, but I think you can build in buffers there," he added during the webinar discussion.
Diesel Prices Surge to N1,700 per Litre
In related developments, diesel depot prices have climbed to about N1,700 per litre following a price adjustment by the Dangote refinery. Several depots in Lagos, Warri, and Port Harcourt have reportedly adjusted their selling prices to reflect the new cost.
Industry sources attribute the price increase partly to rising global crude oil prices, which affect refining costs. This situation underscores the interconnected nature of global energy markets and the need for proactive policy measures to shield Nigerian consumers from extreme price movements.
