The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government and the Nigerian National Petroleum Company Limited (NNPC) to implement the domestic crude supply mandates outlined in the Petroleum Industry Act (PIA). The chamber is advocating for the consistent allocation of over 300,000 barrels of crude oil daily to local refineries, particularly the Dangote Refinery.
In a public statement issued on Tuesday in response to rising oil prices, LCCI noted that the cost of petrol at the pump could approach N1,500 per litre soon.
Dr. Chinyere Almona, Director-General of LCCI, emphasized the urgent need for the federal government and NNPC to enforce these supply obligations under the PIA, ensuring the allocation of over 300,000 barrels each day to local refining facilities, especially the Dangote Refinery.
She also called for a transparent naira-for-crude system, which would help mitigate foreign exchange risks, lower production expenses, and stabilize output levels.
Moreover, Almona pointed out that the Nigerian Midstream and Downstream Petroleum Regulatory Authority should develop a fair pricing strategy based on verifiable cost fundamentals while preventing market dominance abuse without hindering deregulation efforts.
Additionally, she advocated for the speedy operationalization of other licensed refineries to reduce the concentration of risk in the sector, accompanied by maintaining strategic imports to stabilize prices in the short term.
LCCI further highlighted that addressing issues like currency volatility, logistical inefficiencies, and distribution hurdles remains essential for enhancing market efficiency.
Almona remarked that the recent surge in oil prices serves as a significant stress test for Nigeria’s energy and economic systems. She reiterated, “LCCI firmly believes that sustainable moderation of fuel prices cannot be achieved merely through administrative measures, but rather through structural reforms that expand local supply, promote competition, and enhance transparency throughout the entire value chain.”
She asserted that through disciplined execution and robust collaboration between public and private sectors, Nigeria could transform this challenge into an opportunity for establishing a more resilient, competitive, and self- sufficient energy environment, thereby positioning itself and the broader West African region for long-term economic stability and growth.
Furthermore, Almona underscored the necessity for the government to undertake a comprehensive restructuring of the oil and gas sector, enabling Nigeria to emerge as a viable alternative supplier of oil and gas to other African nations and Europe.
With ongoing crises in the Gulf region, demand from European and Asian markets for new sources of supply is increasing, highlighting the need for Nigeria to proactively become a reliable alternative supplier outside Russia and the Gulf.
LCCI pointed out that the recent rise in global oil prices, now around $112 per barrel, is exerting increasing pressure on Nigeria’s downstream petroleum sector, leading to inflationary effects on transportation, food prices, and industrial production.
Almona noted that the latest rise in Dangote Refinery's gantry price to approximately N1,245 per litre signifies escalating pressures in Nigeria’s downstream market, with projected pump prices potentially reaching N1,500 per litre.
She stressed that ongoing inflationary shocks are being felt across various sectors due to these developments. Furthermore, she indicated that the persistent challenge of fuel affordability reflects a deeper structural supply deficit, as Nigeria’s daily demand for petrol exceeds 50-53 million litres, which far exceeds local refining capacity, thus amplifying price pressures.
In this light, government interventions should prioritize strategic market stabilization rather than mere price suppression. Immediate actions should include targeted support for vital sectors such as transportation, agriculture, and small to medium enterprises (SMEs) to alleviate inflationary impacts while avoiding inefficient blanket subsidies.
Stabilizing the Naira through enhanced foreign exchange liquidity and coordinated policy initiatives is crucial, considering the influence of exchange rates on fuel pricing. The government must also ensure clear and consistent policy signals to bolster investor confidence in the deregulated environment.
While fluctuations in crude prices may traditionally indicate potential fiscal benefits, Nigeria’s gains remain limited by production constraints and systematic inefficiencies.
Almona concluded with a call for swift actions to boost crude production specifically aimed at supplying local refineries, thereby adequately meeting the domestic market's needs.
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