FG rules out fuel price control despite Middle East oil crisis
FG rules out fuel price control despite Middle East oil crisis
The Federal Government has ruled out intervening to control petrol prices despite rising geopolitical tensions in the Middle East that are already pushing volatility in global oil markets.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government would not tamper with market-based pricing of petroleum products, stressing that intervention would only be considered as a last resort.
Speaking during an interview aired on Wednesday’s edition of Politics Today on Channels Television, Edun said, “Rather than now reverting back and taking a backward step, we will look at every other measure that can help the cost of living of Nigerians without resorting to non-market pricing.”
He explained that the current administration’s economic philosophy prioritises market-based pricing mechanisms for petroleum products and foreign exchange, describing them as key reforms introduced by President Bola Tinubu to remove long-standing distortions in the economy.
“It is the market price. That is what has been instilled by Mr President that was missing for so long, market pricing of petroleum products,” Edun said.
He noted that while the Middle East crisis could affect global oil markets, the government would respond through targeted policy measures rather than price controls.
According to him, one immediate response has been the expansion of the compressed natural gas programme to cushion transportation costs.
“One of the ways the President immediately announced was 100,000 extra CNG conversion kits to enable vehicles to convert to CNG fuel, which is maybe 25 to 30 per cent of the cost of petrol,” he said.
Edun added that the government would continue to explore initiatives that reduce the cost of living without disrupting market pricing.
Asked whether the government might intervene if petrol prices rise sharply, the minister said, “Normally, given the policies and philosophy of this government, it would always have to be a last resort.”
He also highlighted Nigeria’s growing domestic refining capacity as a major source of resilience amid global energy market disruptions.
Edun said Nigeria’s daily petrol demand is about 50 million litres and local refiners, including the Dangote Refinery, have the capacity to meet domestic needs.
“Our demand is about 50 million litres per day, and the refiners say they can meet that demand, so we are in a relatively strong position,” he said.
According to him, domestic refining has strengthened Nigeria’s ability to withstand global shocks that have forced some countries to ration fuel supplies.
“At this time, the resilience that the Nigerian economy has is coming largely from the fact that we do have that investment in refining,” Edun added.
However, he acknowledged that geopolitical tensions could still affect Nigeria through higher freight costs, rising global interest rates and increased production costs.
“You have gains on one side from higher oil prices, but you also have costs on the other side, particularly freight and other supply chain disruptions,” he said.
Edun warned that persistent global inflationary pressures could lead to higher interest rates worldwide, raising borrowing costs across economies, including Nigeria.
Despite the uncertainty, he maintained that the Nigerian economy had shown resilience in recent years despite global shocks.
According to him, the country has recorded exchange rate stability, rising external reserves, moderating inflation and improving growth.
He added that economic reforms introduced by the Tinubu administration, including subsidy removal and exchange rate unification, had helped stabilise the economy after what he described as difficult inherited conditions.
Edun revealed that Nigeria’s public debt stood at about N122tn when the administration assumed office, including N30tn in Ways and Means advances later regularised as part of efforts to improve fiscal transparency.
“We are coping with a huge debt service burden which was inherited,” he said.
On poverty reduction, Edun said the government aims to raise economic growth to at least seven per cent annually to significantly reduce poverty.
He added that the government’s social protection programme had already reached about 10 million households, representing roughly 50 million Nigerians through direct payments.
The minister said the administration was also expanding financing for micro, small and medium enterprises, which account for about 85 per cent of private sector activity.
He disclosed that new programmes were being developed with development partners to provide affordable financing to small businesses to boost productivity and job creation.
“If in November 2024 you bought dollars at 1,900 and you are now selling at 1,400, what that shows is that the naira is now worth holding,” Edun said.
He also noted that initiatives such as the National Single Window Project were being introduced to enhance export competitiveness and facilitate trade across regional markets, including the Economic Community of West African States and the African Continental Free Trade Area.
Meanwhile, the Federal Government said it is prepared to recalibrate economic policies if necessary as geopolitical tensions in the Middle East intensify.
In a statement signed by the Assistant Director of Information and Public Relations at the Federal Ministry of Finance, Uloma Amadi, the government said the Economic Management Team, chaired by Edun had begun reviewing the possible economic consequences of the crisis.
“The Federal Government will continue to monitor the situation closely and adjust policy measures where necessary to minimise disruptions, sustain investor confidence, and protect the welfare of Nigerians,” the statement said.
