Price Cap May Scare Away Investors from Nigeria's Downstream Oil Sector

Nigeria's plan to cap petroleum product prices may have unintended consequences, according to Festus Osifo, immediate past President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).

Osifo warned that price capping could drive away investors from the downstream oil sector, leading to weaker competition and higher fuel prices. He argued that a competitive market would naturally put downward pressure on prices.

Nigeria urgently needs fresh capital to expand refining capacity and deepen competition in the petroleum market, Osifo said. Instead of focusing on price capping, NMDPRA should attract more investors to build modular and large-scale refineries.

Osfio also called for increased investment in crude oil production, aiming to raise output from 1.8 million barrels per day to between three and four million barrels per day within the next three to 10 years. This would strengthen the industry and generate greater economic benefits.