Looming Fuel Crisis: Ex-PENGASSAN President Warns NMDPRA of Impact of Planned Price Cap
- Festus Osifo, former PENGASSAN president and TUC president, raised alarms over NMDPRA's planned petroleum price cap at a Lagos event
- Osifo argued that a liberalised market with more refinery investors would bring fuel prices down more sustainably than price controls
- The labour leader also called on Nigeria to grow crude oil output from 1.8 million barrels per day to between 3 and 4 million barrels
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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
Festus Osifo, former President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and current President of the Trade Union Congress (TUC), has cautioned that the Nigerian Midstream and Downstream Petroleum Regulatory Authority's (NMDPRA) plan to cap petroleum product prices could deepen the country's fuel crisis and push investors out of the downstream sector.
Source: UGC
Osifo raised the alarm on Saturday at a reception held in Lagos, organised by the TotalEnergies E&P branch of PENGASSAN to mark the end of his six-year tenure as the union's president.
He said the proposed price cap risked reversing the gains made under a liberalised petroleum market by weakening competition and making Nigeria a less attractive destination for downstream investment.
"What we should focus on is to have competition. When we have competition, competition naturally brings down price," Osifo said.
More refineries, not price controls
The TUC president called on the NMDPRA to drop the price-capping approach and instead pursue policies that would draw more investors into the sector, particularly those willing to build modular and large-scale refineries.
He argued that increased market participation would compel businesses to compete for customers, gradually pushing petroleum prices to levels that ordinary Nigerians could afford without the need for regulatory price controls.
Osifo also pointed out that the Petroleum Industry Act (PIA) was designed to support a liberalised petroleum industry, and said the regulator should work to deepen competition in line with that framework rather than introduce measures that could undermine it.
He was direct in his warning: "If we focus on that price capping, we are going to drive away investors."
Nigeria must raise crude output
Beyond the downstream pricing debate, Osifo pressed for a significant jump in Nigeria's crude oil production. He said output needed to climb from its current level of about 1.8 million barrels per day to between three and four million barrels per day within the next three to ten years.
Source: Getty Images
He grounded the argument in Nigeria's estimated crude reserves, which he put at between 30 billion and 38 billion barrels, saying the country was not extracting enough to justify those figures.
According to Osifo, scaling up production would strengthen the oil industry as a whole and generate broader economic benefits for Nigeria.
Source: Legit.ng
