Fuel crisis looms: NMDPRA warned over planned petrol price cap

Festus Osifo, former President of PENGASSAN and current President of the TUC, has warned that the NMDPRA's planned petrol price cap could deepen Nigeria's fuel crisis and scare away investors. He spoke on Saturday at a Lagos reception organised by the TotalEnergies E&P branch of PENGASSAN to mark the end of his six-year tenure as the union's president.

Price cap will drive away investors

Osifo argued that a liberalised market with more refinery investors would bring fuel prices down more sustainably than price controls. He said the proposed cap risked reversing the gains made under a liberalised petroleum market by weakening competition and making Nigeria less attractive for downstream investment.

"What we should focus on is to have competition. When we have competition, competition naturally brings down price," Osifo said.

The TUC president called on the NMDPRA to drop the price-capping approach and instead pursue policies that would attract more investors, especially those willing to build modular and large-scale refineries. He said increased market participation would force businesses to compete for customers, gradually pushing petroleum prices to levels ordinary Nigerians can afford without regulatory price controls.

Osifo noted that the Petroleum Industry Act (PIA) was designed to support a liberalised petroleum industry. He said the regulator should deepen competition in line with that framework rather than introduce measures that undermine it. His warning was blunt: "If we focus on that price capping, we are going to drive away investors."

Push for higher crude oil production

Beyond downstream pricing, Osifo pressed for a major jump in Nigeria's crude oil output. He said production needs to rise from about 1.8 million barrels per day to between three and four million barrels per day within the next three to ten years.

He based this on Nigeria's estimated crude reserves, which he put at between 30 billion and 38 billion barrels. Osifo argued the country is not extracting enough to justify those figures. Scaling up production, he said, would strengthen the oil industry as a whole and generate broader economic benefits for Nigeria.

For Nigerian businesses and consumers, the outcome of this pricing debate matters directly. If the NMDPRA follows through with price caps, investors may hold back, and fuel supply could tighten further. But if competition is allowed to work, prices could ease over time without government intervention.