Reps Warn of Fuel Scarcity as Middlemen Hike Crude Costs
Nigeria faces a fresh round of fuel queues and price hikes due to a breakdown in crude supply to domestic refineries. The House of Representatives Committee on Petroleum Resources (Downstream) issued the warning on Thursday after conducting oversight in Abuja. Lawmakers identified a widening gap between the crude required by the Dangote refinery and what it actually receives. This shortfall threatens to undo recent efforts to stabilise the domestic energy market. Economic stability now hinges on resolving these supply chain inefficiencies within the next 48 hours.
The arithmetic of the crisis is blunt. The Dangote refinery requires at least 15 cargoes of crude oil to operate at a functional level, yet it currently receives only five. This deficit is not merely a matter of scarcity but of predatory pricing. Nigerian crude is reportedly being routed through intermediaries in London and Dubai before reaching local shores. These middlemen add roughly $18 to the price of every $100 barrel without providing any logistical value. Consequently, local refiners pay a premium for domestic resources.
Ikeagwuonu Ugochinyere, the committee chairman, noted that the looming price surge is a product of inefficiency rather than deliberate policy. If the refinery cannot secure enough feedstock at a fair price, the cost of Premium Motor Spirit (PMS) will inevitably rise. The committee described the current arrangement as a direct risk to the welfare of Nigerians. It argued that the presence of offshore intermediaries undermines the entire purpose of domestic refining. The goal of energy independence remains distant while these rent-seeking structures persist.
The committee has demanded that the Presidential Technical Committee on the Crude-for-Naira initiative reconvene immediately. This initiative was designed to bypass the need for foreign exchange and streamline the delivery of crude to local plants. Its apparent failure suggests a lack of coordination between the regulators and the state oil company. Lawmakers insist that the bottlenecks must be cleared within two days to prevent a total disruption of supply. Failure to act will likely result in the return of the dreaded petrol station queues.
Nigeria’s economic landscape is particularly sensitive to fluctuations in energy costs. Transport and food prices typically track the pump price of petrol with painful precision. A significant hike now would exacerbate the existing cost-of-living crisis facing many households. The House committee warned that the current supply gaps are “undermining refining capacity” at a critical moment. Without a steady stream of crude, the nation’s largest private investment risks becoming a stranded asset.
The situation reflects a broader struggle for control over Nigeria’s oil wealth. On one side are the domestic refiners and the public who benefit from lower costs. On the other hand are the entrenched interests that profit from the complexity of international trading. The government must now decide if it will protect its local industry or allow intermediaries to continue skimming the margins. For the average Nigerian, the outcome of this dispute will be measured in the length of the queue at the filling station.