In a recent economic analysis, Prof. Wumi Iledare highlighted the complex dynamics behind Nigeria’s fuel pricing system, emphasizing that the reality of the market cannot be ignored or selectively applied.
According to Prof. Iledare on a Channels TV programme, while the global crude oil market significantly impacts petrol prices—accounting for nearly 70 to 80 per cent of the final cost—Nigeria’s market structure adds an extra layer of difficulty.He noted that Nigeria operates more like an oligopoly, with only two dominant players in the petroleum downstream sector. “They are always watching each other when setting prices. In such a structure, true competition is suppressed and efficiency is often lost,” he stated.
Prof. Wumi cautioned Nigerians against the tendency to criticize the mark prices are high, only to praise it when it appears favorable. “You can’t pick and choose. You either let the market work or you deal with its consequences. Governance must ensure proper regulation if Nigerians are to enjoy any benefit from deregulation,” he said.
Turning attention to the Port Harcourt Refinery, Prof. Wumi urged citizens to manage expectations. He clarified that only the distillation unit is currently functional, meaning the refinery is far from operating at full capacity. “It will take until December 2026 before it can reach its intended output,” he disclosed.
He warned that while lower oil prices might temporarily reduce fuel costs—possibly even driving prices down to ₦800 per litre—such drops are unsustainable and can have long-term consequences. “If the price of crude falls too low, nobody will invest in exploration, and this will catch up with us,” he added.
Prof. Wumi stressed the importance of a strong maintenance culture, skilled workforce, and process optimization to improve refinery performance.
Until then, he urged Nigerians to be patient. “We can’t just wake up and expect everything to work. There’s a lot of ground to cover.”
SOURCE: uodatenigerian