Prioritise supply stability over price fixing amid Middle East crisis, Iledare urges FG
As geopolitical tensions in the Middle East continue to send shockwaves through global oil markets, Nigeria has been advised to shift its focus from price control to securing stable fuel supply as a more sustainable path to economic stability.
Prof. Wumi Iledare, Professor Emeritus of Petroleum Economics at Louisiana State University, gave this charge in an interview with the Business Lens Africa (TBL Africa), warning that attempts to artificially suppress fuel prices could deepen market distortions and worsen long-term vulnerabilities.
According to him, the Federal Government must act swiftly to reinforce supply channels by maintaining import flexibility, improving foreign exchange liquidity for petroleum trade, and strengthening regulatory clarity to calm market uncertainty.
“In times like this, supply security is more critical than price control,” Iledare said.
“Government must ensure the market has access to multiple supply sources while providing clear and consistent regulatory signals that reduce speculation and volatility.”
He noted that while innovative arrangements such as crude-for-naira and structured fuel import deals could provide temporary relief, they must be carefully designed to reflect market realities and avoid becoming another form of hidden subsidy.
“These mechanisms can serve as short-term shock absorbers,” he explained, “but they must be transparent, time-bound, and efficiently implemented.
Most importantly, any cost savings achieved must be reflected in lower pump prices for Nigerians.”
On the broader question of deregulation, the energy economist stressed that a liberalised market does not imply the absence of government oversight. Rather, he said, the state must play a more strategic role in ensuring fair competition and protecting vulnerable citizens.
“A deregulated market is not a lawless market,” Iledare noted.
“Government’s responsibility is to provide credible regulatory governance, enforce competition, and introduce targeted social protection—not blanket subsidies that distort pricing signals and strain public finances.”
He further highlighted the critical role of domestic refining in strengthening Nigeria’s energy resilience, pointing to the Dangote Refinery and emerging modular refineries as key assets in reducing dependence on imported fuel.
However, he cautioned against over-reliance on any single supply source, warning that true energy security lies in maintaining a “contestable market” where imports remain a viable alternative.
“Local refining is essential, but it must operate within a competitive framework,” he said.
“Keeping import options open prevents market dominance and reduces the risk of supply disruption from a single point of failure.”
Turning to the industrial sector, Iledare raised concerns over the impact of rising diesel prices on manufacturing and productivity.
With many Nigerian industries heavily dependent on diesel for power, he warned that sustained price increases could stall economic activity.
To mitigate this, he called for targeted government interventions, including temporary tax relief on energy inputs, improved gas-to-power supply, and enhanced logistics infrastructure to reduce operating costs.
“These are practical measures that can support manufacturers without undermining ongoing market reforms,” he added.
As global uncertainties persist, Iledare’s message underscores a delicate balancing act for policymakers—one that prioritises supply stability, safeguards competition, and delivers relief to citizens without reversing critical reforms in Nigeria’s petroleum sector.
