Even with domestic refineries coming on stream, Nigeria may still feel the heat of global fuel price swings, according to the Centre for the Promotion of Private Enterprise (CPPE).
Dr. Muda Yusuf, founder of CPPE, explained that crude oil—the main raw material for refining—is priced using international benchmarks, meaning local refineries cannot completely escape global market pressures.
He noted that crude prices have surged from about $65 per barrel to over $100, driven largely by rising geopolitical tensions in the Middle East, pushing up the global cost of petrol, diesel, aviation fuel and cooking gas.
“Petroleum products are traded in an integrated global market, so changes in crude prices are quickly reflected in domestic fuel prices,” Yusuf said.
While many Nigerians expect local refining to automatically make fuel cheaper, Yusuf said the economics doesn’t quite work that way. Even crude supplied locally is typically priced in dollars based on global benchmarks, and refineries may pay an additional $3–$6 per barrel premium to secure supply.
However, he stressed that domestic refining still offers key advantages: lower shipping and logistics costs, stronger energy security, reduced reliance on imports, and less pressure on foreign exchange.
Beyond fuel supply, Yusuf added that a strong refining industry can boost sectors like petrochemicals, fertilisers, plastics, pharmaceuticals and paints, while also creating opportunities for Nigeria to export refined petroleum products.
He urged the government to support the sector with reliable crude supply, improved distribution infrastructure, and policies that protect and strengthen local refiners.
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