Nigeria has recorded an estimated ₦6 trillion gain from reforms in the downstream petroleum sector within the first nine months of 2025, the Federal Government has said, citing the impact of fuel market deregulation and reduced reliance on imports.
The Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) disclosed this at the ongoing Nigerian International Energy Summit (NIES) in Abuja, noting that decades of heavy petroleum product importation had imposed significant economic losses on the country.
Speaking at the summit, the Authority’s Chief Executive, Engr. Saidu Mohammed, said the government is prioritising domestic refining and working towards sourcing 100 per cent of Nigeria’s petroleum product needs locally.
“For decades, the downstream sector has been associated with negatives — inadequate infrastructure and suboptimal supply chains,” Mohammed said. “That narrative is changing. The downstream is becoming more market-driven and is gradually attaining the stability required to attract investment.”
He said Nigeria had historically depended entirely on imported petroleum products but is now transitioning from 100 per cent importation towards zero importation, with exports already beginning.
“This is where we are supposed to be,” he said.
₦6trn gain from deregulation
Mohammed attributed the ₦6 trillion gain to the cumulative impact of full downstream deregulation, increased gas utilisation and the sale of petroleum products in naira.
“The bold economic reforms of President Bola Tinubu have created a renaissance in the downstream sector,” he said. “In just nine months of 2025, Nigeria has gained about ₦6 trillion by reducing losses previously incurred through importation.”
He added that the reforms have helped conserve foreign exchange and reposition the energy sector as a net contributor to foreign exchange earnings rather than a drain on national reserves.
“Let the energy sector be a builder of foreign exchange, not an avenue for erosion,” Mohammed said.
Gas takes centre stage
The NMDPRA chief also highlighted the growing role of natural gas in Nigeria’s energy transition, describing the gas sector as an emerging pillar of domestic energy supply and regional exports.
Under the Federal Government’s Decade of Gas initiative, he said policies are being implemented to build infrastructure, stimulate demand and create a commercially driven gas market capable of attracting investment across the value chain.
“What we need is to add value to the gas we have, not just transport or export it raw,” Mohammed said. “Nigeria should be a hub for refined gas products. There is no reason we should not be exporting urea, ammonia and fertilisers.”
Regulation, infrastructure, private capital
Mohammed stressed that effective regulation remains central to sustaining investor confidence, noting that project viability must be established before permits are issued.
“We cannot approve projects for approval’s sake,” he said. “Every project — even a retail filling station — must align with Nigeria’s strategic energy and economic planning.”
He said the downstream revival cannot be funded by public resources alone, adding that inefficient product transportation methods must give way to modern pipeline-based distribution anchored around refinery hubs.
“That is why we are developing a strategy where pipelines originate from refinery hubs such as Dangote, Port Harcourt and others,” he said. “This will replace ageing infrastructure and realign flow directions where old corridors are no longer viable.”
According to him, NMDPRA’s role is to de-risk investment by ensuring fairness, transparency, regulatory consistency and efficient licensing processes.
Market discipline, investor confidence
Mohammed said Nigeria is strengthening market discipline, particularly in the gas sector, through enforcement of the Network Code, which requires valid gas supply agreements and payment guarantees before access is granted.
“Investors invest where contracts are respected and rules are stable,” he said. “Market confidence is not declared; it is built through consistent actions and credible institutions.”
He added that Nigeria’s downstream transformation is a shared responsibility involving regulators, investors, operators, financiers and consumers.
Market still imperfect — Iledare
However, Professor of Petroleum Economics, Wumi Iledare, cautioned that Nigeria’s downstream and midstream markets remain structurally imperfect and anti-competitive.
“Perfection does not exist in Nigeria,” Iledare said. “What the country needs is an inclusive regulator. Without that, market failure is inevitable.”
He argued that all players must be allowed to participate freely, whether through domestic production or importation, noting that this is fundamental to market efficiency.
Iledare said sustained public support and reliance on regulatory institutions are critical for market functionality, warning that attempts to bypass regulators while seeking public sympathy could undermine the system.
“If stakeholders fail to rely on the regulator, the market will fail — and that will benefit no one,” he said.
Comments
Post a Comment