Returning to old pump price would cost over N20trn yearly, Reps warn

The Chairman of the House of Representatives Committee on Petroleum Resources (Downstream), Hon. Ikenga Imo Ugochinyere, on Monday warned that returning to the old petrol pump price under the former subsidy regime would cost the Federal Government over ₦20 trillion annually, adding that such a move could impose an unsustainable burden on public finances.

Hon. Ugochinyere, who disclosed this in Abuja during the presentation of reports on pending matters and the committee’s commendation of the Federal Government’s downstream sector reforms, with the theme “Renewed Hope Downstream Sector Agenda is working and has brought stability to the Sector,” said Nigerians consumed about 50 million litres of petrol daily.

He explained that the estimated annual cost of restoring the old pump price would be close to the entire Federation Account revenue shared among the three tiers of government in 2025.

The lawmaker said blanket fuel subsidies merely transferred the cost of petrol from consumers to the government rather than eliminating the underlying expense. “A blanket subsidy does not lower the cost of fuel; it only changes who pays, and when,” he said.

He maintained that the removal of fuel subsidy had increased the resources available to state governments, enabling some states that previously struggled to pay workers’ salaries to meet their obligations. However, he stressed that any intervention to cushion the effects of rising fuel prices must be targeted, temporary and affordable. “Any subsidy proposal must show what it will cost, how it will be funded and what pump price it will deliver,” he added.

Hon. Ugochinyere, who attributed the pressure on domestic fuel prices partly to the prevailing global situation, noted that conflict in the Gulf had pushed crude oil prices above $100 per barrel, almost 50 per cent higher than their levels before the conflict.

According to him, the challenge for the government is to shield Nigerians from international price shocks without returning to what he described as the waste and corruption associated with the former subsidy regime.

The Imo lawmaker also unveiled a nine-pillar roadmap to downstream energy security, designed to strengthen domestic refining, guarantee crude oil supplies to local refineries, regulate fuel imports, secure critical infrastructure and improve the availability of alternative energy sources.

He said the roadmap would guide the committee’s oversight activities and hold relevant agencies accountable for delivering sustainable improvements in the sector.

The nine pillars include enforceable domestic crude supply obligations backed by law; amendment of the Petroleum Industry Act (PIA) 2021; regulation of the fuel import market; establishment of a National Strategic Stock; nationwide fuel-quality laboratories; accelerated expansion of gas and compressed natural gas (CNG) infrastructure; pipeline security; fair and transparent pricing with targeted consumer relief; and firm timelines for the rehabilitation and operation of state-owned refineries.

On the proposed amendment of the PIA, Hon. Ugochinyere said the committee’s subcommittee, inaugurated on Friday, October 23, 2026, had been mandated to strengthen the existing law rather than dismantle it.

He explained that the proposed amendments would focus on guaranteeing crude supplies to domestic refineries on fair commercial terms, regulating imports to prevent Nigeria from becoming a dumping ground for substandard petroleum products, strengthening regulatory oversight against monopolies and exploitative pricing, and protecting downstream infrastructure while accelerating the expansion of CNG and liquefied petroleum gas (LPG).

“We are not seeking to dismantle the Act, but to refine, strengthen and future-proof it,” he said, adding that the committee would ensure the legal framework addressed emerging challenges in the downstream petroleum industry.

The lawmaker further disclosed that findings presented at Downstream Week 2026 had established four priorities for achieving energy security: protecting pipelines, sustaining domestic refining, restricting imports to verified supply shortfalls and enforcing the Domestic Crude Supply Obligation.

He said local refining had altered the country’s supply outlook, making it necessary for imports to complement domestic production rather than permanently substitute for it.

According to Hon. Ugochinyere, the regulator had recorded zero supply shortfalls and more than 25 days of national sufficiency, while the contribution of domestic refineries to petrol supply had increased by more than 75 per cent.

He said the committee, working with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), had agreed to raise national sufficiency to 45 days within the current quarter and establish a National Strategic Stock capable of meeting up to 90 days of demand in 2027.

He also highlighted measures introduced to ease the impact of rising petrol prices, disclosing that NNPC Limited had granted consumers a ₦66-per-litre discount from October 1, 2026, alongside pump-price reductions in Abuja and Lagos. On October 8, the Federal Government announced that NNPC Retail would surrender its profit margin and sell petrol at cost for 30 days, prioritising commercial transport operators.

Ugochinyere said the intervention was different from the former subsidy arrangement because it would be funded through NNPC Retail’s profit margin rather than direct expenditure from the public treasury. He noted that the committee had been informed that the Executive Vice President, Downstream, of NNPC Limited, Dr Mumuni Dagazau, played a significant role in the decision.

On the country’s refining capacity, he said prospective technical partners had conducted on-site assessments of the Port Harcourt and Warri refineries as part of efforts to ensure that the facilities, when restored, would operate reliably and profitably.

He added that domestic crude supply to Nigerian refineries under the Domestic Crude Supply Obligation reached 97.4 per cent of allocated volumes in the second quarter of 2026. Between January and September, domestic crude accounted for more than 80 per cent of the crude received by Nigerian refineries, while national crude oil production reached 1.56 million barrels per day in June, its highest level in 74 months.

The committee chairman also cited developments in alternative energy, including the commissioning of NNPC Retail’s first solar-powered smart energy station in Abuja in September. The facility offers petrol, cooking gas, CNG and electric vehicle charging services, with between 50 and 70 similar stations expected to be rolled out nationwide within six months. He further disclosed that more than 120,000 vehicles were now operating on CNG, while NNPC Limited had acquired 500 CNG-powered trucks for petroleum product distribution and delivered 35 CNG hybrid buses to the Presidential CNG Initiative.

Meanwhile, the committee dismissed a petition alleging conflict of interest and money laundering against Dagazau, following a review of the report submitted by its subcommittee. Ugochinyere said the petition, submitted by a group identifying itself as the Coalition for Transparency and Accountability in Nigeria’s Petroleum Sector, had been investigated after both the petitioners and the NNPC executive were invited to appear before the panel between October 21 and 23.

He said the petitioners appeared on October 21 but presented only newspaper clippings to support allegations as serious as money laundering. According to him, they were given additional opportunities to submit documentary evidence but failed to return on Thursday and Friday. Dagazau, on the other hand, honoured the committee’s invitation through representatives who responded to the panel’s inquiries. The committee also took note of a subsisting court order relating to the matter, he said. “An allegation is not evidence, and a newspaper clipping is not proof,” Ugochinyere declared, adding that the committee had resolved to dismiss the petition in its entirety. He nevertheless assured Nigerians that the committee remained open to investigating credible allegations of wrongdoing supported by verifiable evidence.

The committee also received a report on its investigation involving NIPCO Plc but granted the subcommittee an additional 14 days to conclude its assignment. Ugochinyere assured Nigerians that the investigation remained active and that the report would be considered when completed. In a related development, the committee commended NNPC Limited’s management and Dagazau for their contributions to the downstream reforms, passing a vote of confidence in President Bola Tinubu and the NNPCL Group Chief Executive Officer, urging the President to continue supporting the company’s management.

Hon. Ugochinyere said the committee would sustain its oversight of the sector and monitor the implementation of all nine pillars of the roadmap to ensure that the gains of the reforms translated into improved energy security and lasting benefits for Nigerians.

While presenting the subcommittee’s report, Hon. Mumuni Aliyu said the petition alleging conflict of interest and money laundering against the Executive Vice President, Downstream, of NNPC Limited, Dr Mumuni Dagazau, was referred to the panel in line with Sections 88 and 89 of the 1999 Constitution, as amended. He explained that the subcommittee was mandated to investigate the allegations, invite the parties and present its findings and recommendations to the main committee.

Hon. Aliyu disclosed that the subcommittee invited the petitioners and Dagazau to appear between October 21 and 23, 2026, but the petitioners, who appeared on October 21, presented only newspaper clippings in support of their allegations.

He said they were directed to return with relevant documentary evidence but failed to attend the subsequent sittings on October 22 and 23, despite efforts by the panel to reach them. “He who alleges must prove,” Aliyu said, stressing that the materials submitted were insufficient to establish the serious allegations contained in the petition.

He further explained that Dagazau, who was reportedly away on a prior national assignment, was represented before the subcommittee, which accepted the arrangement in view of the limited time available for the investigation.

According to Hon. Aliyu, the representatives responded to the panel’s inquiries and supplied relevant documents, with their explanations found satisfactory. The subcommittee also took note of a subsisting High Court order concerning previous allegations relating to the acquisition of OVH, avoiding further investigation of matters covered by the order in deference to the judiciary.

Detailing its findings, Hon. Aliyu said the petitioners failed to provide documentary evidence to substantiate their allegations, did not return to the subsequent hearings and offered no further explanations to support their claims.

He added that Dagazau’s representatives honoured the committee’s invitation and satisfactorily addressed the inquiries put to them. “No evidence was placed before the subcommittee to establish any of the allegations contained in the petition,” he said, recommending that the main committee dismiss the petition in its entirety.

The subcommittee also highlighted developments in the downstream sector during the period under review, including the ₦66-per-litre petrol discount introduced by NNPC Limited from October 1, 2026, and the subsequent 30-day arrangement under which NNPC Retail would sell petrol at cost by foregoing its profit margin. Aliyu said the intervention, which prioritised public transport operators, was funded from the company’s margin rather than public funds.

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He also cited engagements with prospective technical partners for the Port Harcourt and Warri refineries, crude supply to local refineries reaching 97.4 per cent of allocated volumes in the second quarter of 2026, and domestic crude accounting for 80.4 per cent of the 156.5 million barrels received by Nigerian refineries between January and September.

Other achievements identified by the subcommittee included Nigeria’s crude oil production reaching 1.56 million barrels per day in June 2026, the commissioning of NNPC Retail’s first solar-powered smart energy station in Abuja on September 10, and plans to deploy between 50 and 70 similar stations nationwide within six months.

Hon. Aliyu also pointed to the expansion of the LPG and CNG markets as part of efforts to provide Nigerians with alternative energy sources. Based on these developments, the subcommittee recommended commending NNPC Limited’s management and Dagazau for their contributions to the downstream sector, particularly petrol price relief and efforts to revive the country’s refineries.

In its final recommendations, the subcommittee chairman urged the main committee to condemn frivolous petitions unsupported by evidence and caution petitioners against using the National Assembly’s investigative processes to make unsubstantiated allegations against public officers. It also warned that those who submit allegations they cannot prove should be mindful of the potential legal consequences.

The subcommittee further passed votes of confidence in President Bola Ahmed Tinubu and the Group Chief Executive Officer of NNPC Limited, citing the reforms and measures aimed at stabilising the downstream petroleum sector. Following the presentation, the House Committee on Petroleum Resources (Downstream) adopted the subcommittee’s report, thereby endorsing its recommendations to dismiss the petition and commend the downstream sector’s management.