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…Calls for petroleum price moderator
From Desmond Mgboh, Kano
Veteran labour leader, Mustapha Nuhu Wali has called for a fundamental shift in Nigeria’s petroleum pricing policy, urging the country to move beyond the traditional subsidy versus deregulation debate.
The oil and gas development expert made the call while unveiling a policy document entitled “Beyond Petroleum Subsidy: A Petroleum Price Moderator and Downstream Transformation Framework for Nigeria.”
He stressed the need for a Petroleum Price Moderator (PPM) that will operate within a transparent price corridor.
He proposed that when international crude and petroleum product prices are favourable, a defined contribution would be paid into a ring-fenced stabilisation reserve adding that when prices rise sharply beyond predetermined thresholds, the reserve would be deployed to cushion consumers from the shock.
“This is not a return to the old subsidy regime. It is a counter-cyclical stabilisation mechanism designed to protect consumers from exceptional shocks while Nigeria tackles the structural causes of high petroleum costs,” Wali said.
Wali also argued that Nigeria’s problem wass not just subsidy, but the high cost of the entire petroleum supply chain — including crude supply, refining, freight, foreign exchange, financing, pipelines, storage, depots, transportation and distribution.
As a way out, he recommended a forensic, line-by-line review of the petroleum pricing template to determine which costs are unavoidable, excessive, reducible or eliminable.
He also sought a transparent and predictable crude supply to qualified domestic refineries under clear commercial rules covering allocations, pricing, quality, measurement and penalties for non-performance.
Wali also called for the transformation of the Nigerian Pipeline and Storage Company Limited (NPSC) into a professionally managed national petroleum infrastructure operator, with transparent and non-discriminatory access for qualified market participants.
“Ownership does not mean monopoly access. Efficient pipelines and storage facilities can substantially reduce dependence on long-distance trucking and unnecessary logistics costs,” he noted.
On refining, Wali recommended an independent technical assessment of NNPCL refineries and, where viable, transparent partnerships with competent private investors, international refinery operators and development finance institutions,
He recommended gor a structured participation framework for International Oil Companies (IOCs) and upstream producers to invest in refinery rehabilitation, storage, pipelines and technology transfer.
According to him, once the stabilisation reserve reaches a defined threshold, surplus resources should be channelled into commercially viable downstream infrastructure through repayable financing, potentially at single-digit interest rates.
