Nigeria must boost crude production, refine more locally, and expand gas utilisation to withstand external shocks from disruptions such as those linked to the Strait of Hormuz, according to Mr Francis Nwaochei, Chairman of the Society of Petroleum Engineers, Nigeria Chapter. He identified domestic refining, energy diversification, and stronger macroeconomic buffers as key to reducing vulnerability to global price swings. A disruption in the Strait of Hormuz would elevate crude benchmarks like Brent, increase freight and insurance costs, and trigger inflation, foreign exchange instability, and fiscal strain, especially in import-reliant economies. Nwaochei advocated for short-term stabilisation measures and medium-term structural reforms, including optimising strategic petroleum reserves, with a 30–60 day import cover capable of smoothing supply interruptions. He urged a shift from blanket fuel subsidies to targeted, time-bound price controls in critical sectors such as transport and agriculture. Diversifying import sources and logistics to reduce reliance on Middle Eastern supply chains was also recommended. Nwaochei called on the Central Bank of Nigeria to manage liquidity and FX volatility while fiscal authorities use counter-cyclical tools. He stressed the need for transparent crude supply agreements and commercial governance in state refineries, including those under the Nigerian National Petroleum Company Limited. Private sector involvement, including support for the Dangote Refinery and modular refineries, should be deepened through stable regulatory frameworks. Refinery–petrochemical integration could enhance value addition in fertilisers and plastics.
Francis Nwaochei's intervention exposes a long-standing contradiction in Nigeria's energy policy: the country produces crude oil but remains hostage to global fuel markets due to its near-total reliance on imported refined products. His call to shift state refineries from endless rehabilitation cycles to commercially viable operations cuts to the heart of decades of mismanagement and political inertia. The fact that NNPC Limited's refineries still do not run sustainably, despite billions spent, underscores a systemic failure far beyond technical glitches.
The economic implications of Nigeria's refining deficit are not abstract—they hit households and businesses through fuel prices, inflation, and FX volatility. When global benchmarks rise due to geopolitical tensions like those around the Strait of Hormuz, the pain is amplified locally because Nigeria lacks the domestic capacity to buffer the shock. Nwaochei's push for targeted price mechanisms instead of blanket subsidies reflects a growing consensus that poorly designed interventions distort markets and enrich cartels. His emphasis on gas-to-power and gas-to-industry projects aligns with Nigeria's underutilised gas reserves, which could reduce import dependence if properly harnessed.
For ordinary Nigerians, especially transporters, farmers, and small manufacturers, every global disruption means higher operating costs and reduced productivity. Dependence on imported diesel and petrol makes energy access unpredictable and expensive. A functioning domestic refining sector, even at partial capacity, would stabilise supply and reduce inflationary pressure.
This moment fits a broader pattern: Nigerian energy policy remains reactive, shaped more by crisis than strategy. Repeated calls for refinery turnaround, private investment, and gas utilisation have echoed for decades with little structural change. Nwaochei's recommendations are not new—they are a restatement of long-ignored truths.
