KEY POINTS
- Fuel supply stability should take priority over price control to avoid market distortions and economic risks.
- Flexible imports, better forex access, and transparent policies are key to stabilising Nigeria’s fuel market.
- Rising diesel prices threaten industries, requiring targeted interventions without reversing reforms.
Energy economist Wumi Iledare has urged the Federal Government to focus on ensuring steady fuel supply rather than controlling prices, warning that global oil disruption, sespecially from the Middle East continue to create uncertainty in energy markets.
He stressed that artificial price of fuel suppression could distort the market and worsen Nigeria’s long-term economic outlook.
According to the expert, strengthening supply channels through flexible fuel imports, improved foreign exchange liquidity, and clear regulatory policies is essential to stabilising the market.
He noted that initiatives like crude-for-naira arrangements and structured imports could provide temporary relief but must remain transparent, time-bound, and reflective of market realities to avoid becoming indirect subsidies.
Mr Iledare emphasised that deregulation does not mean a lack of government involvement, insisting that authorities must enforce competition, ensure fair pricing, and provide targeted social support instead of blanket subsidies.
He highlighted the importance of domestic refining, pointing to the Dangote Refinery and modular refineries as critical to reducing import dependence, while cautioning against relying on a single supply source.
Rising diesel costs threaten industries
The expert warned that increasing diesel prices are putting pressure on Nigeria’s manufacturing sector, as many industries rely heavily on diesel for power.
He recommended targeted interventions such as temporary tax relief on energy inputs, improved gas-to-power supply, and better logistics infrastructure to support productivity without reversing ongoing reforms.
Mr Iledare concluded that policymakers must strike a balance between ensuring supply stability, promoting competition, and protecting consumers, while sustaining critical reforms in Nigeria’s petroleum sector.
