16th April , 2025
News desk
The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, has raised concerns over the negative impact of global oil market volatility on Nigeria’s economy, warning that the country’s revenue is under pressure due to falling crude oil prices and unstable international policies.
Speaking at the State House during the Meet-the-Press briefing organised by the Presidential Communications Team, Ahmed said the drop in petroleum product prices though beneficial for consumers poses significant economic risks for Nigeria, which remains heavily reliant on oil exports.
“As consumers, we are happy the price is coming down, but as a nation, it’s not good for our economy because our revenue inflow is also impacted,” he said.
Ahmed attributed much of the market instability to erratic policy shifts from the United States government, particularly those of former President Donald Trump, citing frequent reversals and unpredictable tariffs as contributing factors. He pointed to a recent sharp drop in crude oil prices from $73 to $60 per barrel in one day as a case in point.
He also highlighted domestic issues, including pipeline vandalism and declining production, which continue to hamper Nigeria’s oil sector. Recent data from the Organization of the Petroleum Exporting Countries (OPEC) indicate that Nigeria’s crude output has dropped to approximately 1.4 million barrels per day.
Further complicating the global energy landscape are US trade policies, especially tariffs targeting China and other nations, which have rattled investor confidence and disrupted global supply chains. Ahmed noted that this unpredictability has led to increased day trading and short-term market behavior, making long-term planning difficult for oil-dependent economies like Nigeria.
“The global oil market has been volatile due to the new American government’s tariff policies, not only targeting China but the global economy,” Ahmed stated. “This has caused widespread uncertainty across industries, including oil and gas.”
On the local front, Ahmed revealed that Nigeria has made strides in reducing dependence on imports of Premium Motor Spirit (PMS). Imports have declined sharply from 44.6 million litres per day in August 2024 to just 14.7 million litres per day by April 13, 2025, according to the NMDPRA’s supply tracker. Over the same period, local PMS production surged by 670 per cent, driven by the restart of the Port Harcourt Refining Company and increased output from modular refineries.
Despite this progress, Ahmed noted that local supply exceeded the government’s 50 million litres per day consumption benchmark only twice in the past eight months—in November (56 million litres) and February (52.3 million litres).
The NMDPRA CEO also provided a breakdown of supply sources. Oil Marketing Companies (OMCs) currently supply 55–60 per cent of national PMS, while the Dangote Refinery now contributes up to 40 per cent. Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL), which supplied 24 million litres per day in October, has recorded no deliveries since February.
In terms of refining capacity, Nigeria now has ten operational refineries—six private and four public—collectively processing up to 1.12 million barrels per day. The Dangote Refinery leads with 650,000 barrels per day, followed by the revitalised Port Harcourt complex (150,000 bpd), Warri (125,000 bpd), and Kaduna (110,000 bpd).
According to Ahmed, the NMDPRA has issued 47 licences to establish refineries and 30 licences to construct, with a combined potential capacity of nearly 3 million barrels per day. However, only four refineries currently hold operational licences, with a modest combined output of 27,000 barrels per day.
He added that five major projects, including Dangote’s facility and AIPCC Energy’s 30,000 bpd refinery, are in various stages of construction or commissioning, signaling hope for increased domestic capacity in the near future.
Ahmed concluded by urging industry stakeholders to brace for continued volatility in the global oil market, while affirming the government’s commitment to strengthening local refining and ensuring energy security.
