The House of Representatives Committee on Petroleum Resources (Downstream) has raised fresh concerns over a potential return of fuel scarcity across Nigeria, warning that petrol queues and a spike in pump prices may be imminent if urgent corrective measures are not taken.
Speaking at a press briefing at the National Assembly in Abuja on Thursday, the committee chairman, Ikenga Ugochinyere, described the situation as a looming crisis that could significantly worsen the economic burden on Nigerians within weeks.
He cautioned that unless key supply challenges are resolved within the next 48 hours, the country risks experiencing widespread fuel shortages, distribution disruptions, and escalating petrol prices.
According to him, findings from the committee’s oversight activities indicate that the anticipated price increase is not driven by deliberate government policy but by systemic inefficiencies in the fuel supply chain.
At the centre of the crisis is the inadequate supply of crude oil to the Dangote Refinery, widely regarded as pivotal to Nigeria’s push for energy self-sufficiency and stable fuel pricing.
Ugochinyere disclosed that although the refinery is allocated about 21 cargoes of crude oil and requires a minimum of 15 cargoes to function optimally, it is currently receiving only five.
“This shortfall is already undermining refining capacity and poses a direct risk to fuel availability across the country,” he said.
The committee also expressed dissatisfaction with the quality of crude supplied to domestic refineries, noting that substandard grades are being delivered to facilities designed for higher-quality inputs. It stressed the need to prioritise high-grade crude from the Niger Delta to maximise refining efficiency.
Another major concern raised is the rising cost burden imposed on local refiners through international intermediaries.
The lawmaker revealed that these middlemen are significantly inflating crude prices.
“Crude oil produced in Nigeria is being sold to our refineries through middlemen based in London and Dubai, who add no value but collect huge fees.
“For every barrel priced at $100, refineries pay $118, with the additional $18 going to intermediaries”, he said.
He further noted that the premium paid by domestic refiners has surged dramatically from $2–$4 per barrel to over $18, describing the arrangement as exploitative and unsustainable.
According to him, the added costs are inevitably passed on to consumers through higher fuel prices and supply instability.
To avert the looming crisis, the committee called on the Presidential Technical Committee overseeing the crude-for-naira initiative to reconvene within 48 hours to address the bottlenecks.
It also urged strict enforcement of the Domestic Crude Oil Supply Obligation as stipulated in the Petroleum Industry Act 2021, alongside an urgent review of crude quality standards.
He appealed to Tinubu to issue a firm executive directive to ensure compliance by all stakeholders and safeguard the country’s domestic energy supply chain.
While urging Nigerians to remain calm and avoid panic buying, Ugochinyere warned that inaction could trigger widespread queues at filling stations, increased transport fares, and a deeper cost-of-living crisis.
He stressed that it remains unacceptable for Nigeria—Africa’s largest oil producer—to struggle with supplying crude to its own refineries.
The chairman also extended goodwill messages to Muslims observing Eid al-Fitr and Christians preparing for Easter, calling for unity in confronting the nation’s economic challenges.
The committee’s warning comes amid a sharp rise in petrol prices across Nigeria, largely influenced by escalating geopolitical tensions involving Iran, Israel, and the United States.
The crisis, marked by military confrontations and heightened instability in the Middle East—a region responsible for a significant share of global oil supply—has triggered volatility in international crude oil markets. Supply fears have driven up global oil prices, increasing the cost of refined petroleum products worldwide.
For Nigeria, the impact has been particularly severe. Despite being a major crude oil producer, the country still depends heavily on imported refined fuel.
This dependence exposes domestic petrol prices to fluctuations in global oil prices, foreign exchange volatility, and rising shipping and insurance costs.
In recent weeks, petrol prices in Nigeria have surged dramatically—from about ₦746–₦850 per litre before the escalation to over ₦1,200 per litre in many parts of the country. The increase reflects not only global oil price shocks but also the weakening naira and higher logistics costs tied to international supply disruptions.
The situation has intensified inflationary pressures, raising transportation costs, food prices, and overall living expenses for millions of Nigerians.
Against this backdrop, the operational challenges facing domestic refineries—particularly crude supply constraints to the Dangote Refinery—have heightened fears that Nigeria may be unable to cushion the impact of global shocks, thereby worsening fuel scarcity and price instability in the near term.
SOURCE: Punch
