•Fuel scarcity
House of Representatives Committee on Petroleum Resources (Downstream) has raised fresh concerns over a looming increase in fuel prices, warning that Nigeria may soon witness a return of fuel scarcity and long queues if urgent measures are not taken.
Following the recent escalation of the war in the Middle East, Nigeria has recorded the sharpest increase in the pump price of petrol worldwide.
Chairman of the House committee, Ikeagwuonu Ugochinyere, while briefing journalists at the National Assembly complex in Abuja, yesterday, cited disruptions in crude oil supply to domestic refineries as a major threat to economic stability.
He warned that unless the issues were resolved within 48 hours, Nigerians could face worsening hardship due to rising petrol prices and supply shortages, reports The Guardian.
According to him, findings from the committee’s oversight activities indicate a strong likelihood of an increase in the pump price of Premium Motor Spirit (PMS), driven not by government policy but by supply chain inefficiencies.
A key issue identified is the inadequate supply of crude oil to the Dangote Refinery. Ugochinyere disclosed that while the refinery is entitled to about 21 cargoes and requires at least 15 to function optimally, it is receiving only five cargoes – far below operational needs.
The committee also expressed concern over the quality of crude being supplied, describing it as substandard for a refinery of such scale and importance.
It stressed that domestic refineries, particularly Dangote, must be prioritised for high-grade crude sourced from the Niger Delta.
Another major concern raised is the increasing cost burden on local refineries due to the role of international trading intermediaries.
The lawmaker revealed that domestic refiners were paying a premium of over $18 per barrel to foreign trading firms, up from the previous $2 to $4.
“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,” he said, explaining that for every barrel priced at $100, refineries pay $118, with the additional $18 going to intermediaries.
He described the practice as exploitative and warned that the added costs were ultimately transferred to consumers through higher fuel prices.
To address the situation, the committee called on the Presidential Technical Committee on the Crude-for-Naira initiative to reconvene within 48 hours to resolve the supply bottlenecks.
It also urged the immediate restoration of adequate crude supply to domestic refineries, strict enforcement of the Domestic Crude Oil Supply Obligation under the Petroleum Industry Act (PIA) 2021, and improvements in crude quality standards.
According to a market analysis of Global Petrol Prices data, the country saw a 39.5 per cent increase in pump prices between February 23 and March 16.
Trailing the West African country, Laos experienced a 32.9 per cent rise during the period, while Australia and Vietnam each saw a 31.8 per cent rise, and the United States of America (USA) recorded a 23.6 per cent increase.
Petrol prices increased by 18.7 per cent in Spain, 17.2 per cent in Canada, 14.9 per cent in Germany, 14.3 per cent in Egypt and 12.3 per cent in France.
China recorded a 10 per cent increase, while Ethiopia followed with 7.9 per cent. The United Kingdom and United Arab Emirates (UAE) showed similar momentum at 6.5 per cent and 6.4 per cent, respectively.
Liberia recorded a 4.9 per cent increase, closely followed by Hong Kong at 4.7 per cent.
At the lower rung, Croatia and Qatar both saw a 2.7 per cent rise, while South Africa recorded a marginal one per cent increase and Mexico experienced a petrol price change of 0.5 per cent.
The development comes amid the ongoing war in the Middle East, which has caused the largest supply disruption in the history of the global oil market.
Oil prices consequently climbed to a four-year high, driving up petrol prices in Nigeria.
Although local refining and domestic petrol production were expected to help stabilise prices, the increase has suggested otherwise, with the product selling for as much as N1,200 per litre.
This has led to a doubling of transport costs on some major routes across the country.
