The proposed price cap on petroleum products by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could have the opposite effect of its intended objective, triggering investor flight and ultimately putting upward pressure on petrol prices, Trade Union Congress President, Festus Osifo, has warned.
Osifo, who is also the immediate past President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said price control could discourage investors from committing fresh capital to Nigeria’s refining sector at a time when the country urgently needs more refineries and stronger competition to bring down petroleum product prices.
Speaking in Lagos at a reception organised by members of his former PENGASSAN branch at TotalEnergies E&P, Osifo urged the NMDPRA to prioritise competition and increased domestic refining capacity rather than imposing controls on market prices.
According to him, the Petroleum Industry Act established a liberalised petroleum market, making the entry of more refiners and petroleum suppliers critical to achieving sustainable price competition.
“More refineries are needed to force down prices,” Osifo said, stressing that attracting investments into modular and large-scale refineries would expand domestic supply and create the competitive conditions required to lower prices.
His position comes as the downstream market adjusts to a more volatile crude oil environment and increasing pressure on domestic petroleum product prices. Industry operators have increasingly linked movements in petrol prices to crude oil costs, logistics, foreign exchange and other replacement-cost considerations.
For investors, Osifo argued that regulatory price intervention could create uncertainty over their ability to recover costs and earn competitive returns. Such uncertainty, he said, could make Nigeria less attractive to capital seeking opportunities in refining and downstream infrastructure.
He also called for substantially higher crude oil production, saying Nigeria should raise output from about 1.8 million barrels per day to between three million and four million barrels per day over the next three to 10 years.
Osifo said higher crude production would provide feedstock for domestic refineries, strengthen Nigeria’s energy security and allow the country to capture greater economic value from its estimated 30 billion to 38 billion barrels of crude reserves.