Expert urges FG to direct oil windfall into refineries & gas

KEY POINTS

• President of PETROAN, has called on the Federal Government to strategically reinvest the current crude oil windfall into comatose refineries and the national gas revolution.
•  With Brent crude prices surging between $92 and $106 per barrel due to the U.S./Israel-Iran conflict, Nigeria is significantly outperforming its $64.90 budget benchmark.
•  Gillis-Harry likened the current situation to the 1990s Gulf War windfall, where Nigeria earned over $12 billion, cautioning against repeating past mismanagement of excess earnings.
• To maximize benefits, he urged the government to expand production capacity toward 4 million barrels per day (mbpd) to meet both international obligations and domestic refining needs.

MAIN STORY

The escalating crisis in the Middle East, specifically the tensions between the U.S./Israel and Iran, has created a “time-limited opportunity” for Nigeria’s fiscal health. Energy expert Dr. Billy Gillis-Harry noted on Sunday that the effective closure of the Strait of Hormuz and strikes on regional energy hubs have pushed global prices far above Nigeria’s 2026 fiscal assumptions.

While the 2026 budget is anchored on $64.90 per barrel and 1.84 mbpd, the current price surge presents a massive revenue gap that Gillis-Harry believes should not be spent on consumption. Instead, he advocates for a “productive investment” model. “We have a sovereign wealth fund that should be strengthened, and our refineries that have remained largely comatose need to be revived,” he stated.

 He also highlighted the Gas Revolution—specifically Compressed Natural Gas (CNG)—as a sector requiring urgent funding to provide cheaper energy alternatives for Nigerians facing rising transport costs.

Addressing the complexities of domestic supply, the PETROAN president explained that Nigeria cannot simply divert all its oil to local refineries like Dangote. Due to Joint Venture (JV) agreements with majors like Shell and Chevron, a portion of production is pre-allocated. Therefore, the only sustainable path to becoming a refined product export hub is to aggressively increase upstream production while maintaining market-driven pricing.

WHAT’S BEING SAID

• “Nigeria stands to benefit from a significant fiscal windfall… the current price presents a major revenue opportunity,” stated Dr. Billy Gillis-Harry, National President of PETROAN.
• On domestic pricing: “Crude oil is priced internationally and anybody that wants to buy crude oil in Nigeria will buy it at the international price.”
• Regarding the gas initiative: “The gas revolution being promoted by the government is a step in the right direction… [it] should receive stronger funding.”

WHAT’S NEXT

• PETROAN continues to advocate for the transparent privatization of the four state-owned refineries by the end of Q1 2026 to ensure they are brought back to operational status using the windfall.
• The association is planning a courtesy visit to the Presidential CNG Initiative (P-CNGI) board to discuss converting up to 6,000 retail outlets into “daughter stations” for gas distribution.
• The Federal Ministry of Finance is expected to provide a mid-quarter report by late March detailing how the “excess” crude revenue from the January–March price spike is being allocated.

BOTTOM LINE

The Bottom Line is that while the Middle East crisis brings domestic pain through higher fuel costs and inflation, it offers the Nigerian government a “fiscal war chest.” As Dr. Gillis-Harry suggests, the difference between $65 and $100+ oil could either be lost to recurring expenses or used to finally fix the structural flaws in Nigeria’s energy value chain—specifically its refining capacity and gas infrastructure.