Nigeria’s petrol price could have surged beyond ₦2,000 per litre if the country had remained fully dependent on imported fuel, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said, highlighting the growing importance of local refining capacity in stabilising the energy sector.
ENigeria Newspaper gathered that the Authority Chief Executive, Saidu Mohammed, made the disclosure in a recent exclusive interview with New Telegraph, noting that domestic refining has helped cushion the impact of global oil market volatility.
“If we had no refinery today, what you would have called a surge in petrol price would probably have crossed ₦2,000 per litre. We would have had a completely different situation in this country,” he said.
According to Mohammed, the country is now transitioning away from heavy reliance on fuel imports, a shift he described as critical to economic stability and energy security.
“The entire petroleum products market is now fully deregulated. In that situation, the regulator does not control the price. What we can do is influence stability by ensuring the availability of crude feedstock and encouraging local refining.
“Since I came on board, what is paramount is to gradually reduce reliance on imports. Importation has destroyed many industries in this country in the past, and we don’t want the refining sector to go that way.”
Drawing a parallel with the collapse of Nigeria’s textile sector, the NMDPRA boss cautioned against repeating similar mistakes.
“The textile sector disappeared largely because of uncontrolled imports. We exported cotton but failed to support our local manufacturers. We cannot allow the refinery sector to suffer the same fate.”
To strengthen local refining, he disclosed that regulators and key industry players are working to ensure adequate crude oil supply to domestic refineries.
“We had a meeting just yesterday with the NUPRC, NNPC and other stakeholders. The entire discussion was about how to improve crude supply to Nigerian refineries because the export market pays more. If we want petrol prices to remain stable in Nigeria, we must guarantee feedstock for local refineries.”
He added that while total allocation of crude to local refineries may not be feasible, supply must significantly increase.
“Even if we cannot meet 100 per cent of refinery needs with Nigerian crude, we should not be talking about 30 per cent. We should be talking about 70 or even 80 per cent. That is the target we are pushing for.”
On pricing, Mohammed clarified that the Federal Government currently has limited room to directly reduce fuel prices due to the deregulated nature of the market.
“The current pricing template for PMS does not contain taxes that the government can remove. There are no taxes on petrol consumption. The only meaningful support the government can provide is to strengthen local refining.”
He also traced the evolution of Nigeria’s petroleum supply system, noting that the country had moved through multiple phases—from early refinery-based distribution to a period of heavy import dependence.
“In the early days, Nigeria had just one refinery and petroleum products were distributed largely by rail. Later, more refineries, depots and pipelines were built, and the system worked efficiently. At one point, we were even exporting products.
“Gradually we entered a third phase where domestic refining capacity collapsed, and Nigeria became heavily reliant on importation. That period hurt the economy and placed enormous pressure on foreign exchange. Now we are in a new phase where everyone must rally to support local refining capacity. This is critical to protecting our economy and safeguarding energy security.
“Fuel importation used to put massive pressure on foreign exchange. If we were still importing at the same level today, I honestly do not know where the naira would have been in the last five or six months.
“At least now there is some level of predictability. You can plan with the exchange rate. Before, the pressure was much worse.”
