Nigeria's Planned Price Cap Sparks Warning of Investor Flight and Higher Fuel Prices

Festus Osifo, immediate past President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has warned that a planned price cap on petroleum products by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could trigger investor flight from Nigeria's downstream oil sector.

Osifo, who is also President of the Trade Union Congress of Nigeria (TUC), said this in Lagos, during a reception in his honour, put together by members of his organisation, TotalEnergies E&P branch of PENGASSAN. He argued that price capping could send a negative signal to investors at a time when Nigeria urgently needed fresh capital to expand refining capacity and deepen competition in the petroleum market.

Osofo urged NMDPRA to focus instead on attracting more investors to build modular and large-scale refineries, arguing that a competitive market would provide a more sustainable route to lower petroleum prices. He pointed out that the Petroleum Industry Act (PIA) had provided for a liberalised petroleum industry, stressing that the priority should be to bring more players into the market because competition would naturally put downward pressure on prices.

Osofo also called for increased investment in crude oil production, saying Nigeria should raise output from about 1.8 million barrels per day to between three and four million barrels per day within the next three to 10 years.