Abuja: A renowned economist, Dr. Chijioke Ekechukwu, has urged the Federal Government to supply crude oil to local refineries at subsidised rates to cushion the impact of global supply disruptions on domestic petroleum product prices. Ekechukwu, the Managing Director/Chief Executive Officer of Bristol Investments Limited, shared this perspective in an interview conducted in Abuja.
According to News Agency of Nigeria, Ekechukwu was reacting to the ongoing Middle-East crisis and global tensions affecting the energy sector, specifically Nigeria’s petroleum industry. The recent tensions involving the U.S., Iran, Israel, and allied nations, particularly around the strategic Strait of Hormuz, have intensified geopolitical pressure and significantly disrupted energy markets and supply chains.
The economist explained that in a deregulated petroleum products market, prices are largely determined by global demand and supply dynamics. The tensions have triggered supply distortions across the Gulf region, naturally pushing international oil prices upward due to fears of reduced supply from major crude oil-producing countries. Ekechukwu noted that such geopolitical crises typically lead to market volatility and higher prices, as key suppliers of crude oil are affected by instability.
To mitigate the impact on Nigerians, Ekechukwu advised the Federal Government to prioritise domestic energy security by supplying crude oil to local refineries at discounted rates. This arrangement would enable refineries to process and sell petroleum products locally at relatively stable prices, even as Nigeria continues to export crude oil at prevailing international market rates.
Ekechukwu pointed out that during crises such as the U.S.-Iranian conflict, which has culminated in supply distortions around the Gulf countries, prices are expected to rise due to the shortage of supply from major crude oil suppliers. He suggested that by supplying crude oil to local refineries at subsidised prices, the Federal Government could help maintain regular prices for refined products.
He also highlighted the potential of the Dangote Refinery, with its substantial refining capacity, to meet a significant portion of Nigeria’s domestic demand for refined petroleum products, thereby reducing reliance on imports. Additionally, Ekechukwu stressed the necessity for stricter border controls to prevent the smuggling of refined petroleum products out of the country, warning that weak enforcement could undermine efforts to stabilise local prices.