Expert Urges FG to Consider Temporary Return of Petrol Subsidy if Prices Hit N2,000/Litre
- An energy expert has advised the federal government to consider reintroducing fuel subsidies
- The proposed subsidy is intended as a temporary measure to cushion the effects of global oil price volatility
- He called for improvements to the crude-for-naira policy to reduce exposure to global market shocks
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The federal government has been advised to consider reintroducing fuel subsidies if global oil prices continue to rise and push petrol prices in Nigeria close to N2,000 per litre.
Source: Getty Images
The recommendation was made by Joe Nwakwue, partner at Zera Advisory and Consulting, during a webinar organised by the Major Energies Marketers Association of Nigeria (MEMAN) on Tuesday.
Call for temporary intervention
As reported by Daily Trust, Nwakwue stressed that any subsidy reintroduction should be a short-term measure aimed at cushioning the impact of global oil price volatility on Nigerians.
He explained that the intervention would help protect both consumers and the broader economy if international market disruptions persist.
Nwakwue added that such a policy must be clearly defined, with a structured exit plan once global oil prices begin to decline.
Strengthening crude-for-naira policy
The energy expert also called for improvements to Nigeria’s crude-for-naira initiative, noting that it could serve as a buffer against external shocks.
He said refining the framework of the policy would help reduce the country’s exposure to fluctuations in the international oil market.
Reliance on single source risky
Nwakwue warned that reliance on a single refinery could create dominance risks, which must be mitigated through regulatory measures.
He said allowing fuel imports remains critical to maintaining competition and preventing price distortions.
In addition, the expert stressed the importance of strengthening regulatory institutions in the oil and gas sector.
He noted that effective oversight would ensure compliance with industry rules and promote stability in the downstream market.
Source: Getty Images
Global crisis highlights need for flexibility
Meanwhile, another stakeholder, the Chairman of MEMAN, Hubb Stokman said recent volatility in the global oil market, triggered by the Middle East crisis, has reinforced the importance of flexible supply arrangements.
Stokman, while speaking at the webinar, explained that the crisis occurred shortly after the supply agreement was introduced, leading to rapid changes in global prices.
Despite this, he said the Nigerian market has remained stable so far, with the arrangement delivering positive results.
However, he stressed the need for continuous adjustment in response to changing global conditions, warning against rigid market strategies.
“I think that using the mechanism of the naira-for-crude, as I said, it’s until I see the agreements; I wouldn’t know, but I think you can build in buffers there,” he added.
Diesel prices surge to N1,700 per litre
Legit.ng earlier reported that Diesel depot prices have climbed to about N1,700 per litre following a price adjustment by the Dangote refinery.
Several depots in Lagos, Warri, and Port Harcourt have reportedly adjusted their selling prices to reflect the new cost
Industry sources attribute the price increase partly to rising global crude oil prices, which affect refining costs.
Source: Legit.ng
