KEY POINTS
- The Centre for the Promotion of Private Enterprise (CPPE) says having local refineries in Nigeria will not completely stop fuel prices from going up or down.
- Dr. Muda Yusuf, Founder of CPPE, explained that this is because crude oil is priced using international benchmarks, no matter where it is refined.
- Crude oil prices have jumped from $65 to over $100 per barrel in just a few weeks due to tensions in the Middle East.
- While local refining helps with energy security and saving shipping costs, the price of the raw oil remains tied to the global market.
MAIN STORY
The Centre for the Promotion of Private Enterprise (CPPE) has explained that having domestic refineries in Nigeria cannot fully protect the country from changes in global fuel prices. In a statement on Monday in Lagos, the Founder of CPPE, Dr. Muda Yusuf, said this is because crude oil which is the main ingredient for making fuel is priced based on international standards.
This comes as global oil prices have spiked by over 50 per cent recently because of troubles in the Middle East.
Dr. Yusuf, who is also an economist, noted that when the price of crude oil goes up globally, the cost of refined products like petrol, diesel, and cooking gas also goes up everywhere, including Nigeria. He pointed out that many Nigerians expect local refineries to automatically make fuel very cheap, but the way refining works does not support that idea. He explained that even the crude oil supplied to local refineries is priced in U.S. dollars using global benchmarks.
However, the CPPE boss mentioned that domestic refining still has many good sides. For example, it helps Nigeria save money on shipping, marine insurance, and port charges that come with importing fuel. Refining oil at home also makes Nigeria’s energy supply more secure because the country will no longer have to rely so much on other nations for fuel. Additionally, the refining industry helps other businesses like those making fertilizers, plastics, and paints by providing them with the raw materials they need.
WHAT’S BEING SAID
- “Fluctuations in crude oil prices are transmitted to domestic fuel prices in most economies, including Nigeria,” stated Dr. Muda Yusuf, Founder of CPPE.
- He noted that while local refining doesn’t stop price changes, it “significantly reduces supply disruption risks and strengthens Nigeria’s energy security.”
- Yusuf urged the government to provide a “supportive policy environment” to help local refiners stay competitive.
WHAT’S NEXT
- Policy Support: The government is expected to look into better ways to ensure local refineries get a steady supply of crude oil.
- Infrastructure Growth: There may be more focus on fixing pipelines and depots to make it easier to move locally refined fuel across the country.
- Export Opportunities: As local production grows, Nigeria may start looking at selling refined fuel to neighboring countries to earn foreign exchange.
BOTTOM LINE
The Bottom Line is that while local refineries are great for making sure Nigeria doesn’t run out of fuel, they aren’t a magic wand for low prices. Since the “soup” is made from expensive global “ingredients,” the price at the pump will still follow the world market, even if we save money on the shipping.
 has explained that having domestic refineries in Nigeria cannot fully protect the country from changes in global fuel prices. In a statement on Monday in Lagos, the Founder of CPPE, Dr. Muda Yusuf, said this is because crude oil which is the main ingredient for making fuel is priced based on international standards.){kind=link}