An energy economist has advised the Federal Government to prioritise stable fuel supply over price control measures to ensure economic stability, warning that attempts to suppress prices artificially could deepen market distortions and worsen long-term vulnerabilities. Professor Wumi Iledare, Professor Emeritus of Petroleum Economics at Louisiana State University, spoke in an interview against the backdrop of geopolitical tensions in the Middle East disrupting global oil markets and triggering volatility.
Iledare argued that supply security is more critical than price control during periods of market uncertainty. He urged the government to reinforce supply channels through import flexibility, improved foreign exchange liquidity, and clearer regulatory frameworks to calm market instability. “In times like this, supply security is more critical than price control. Government must ensure access to multiple supply sources while providing clear, consistent regulatory signals that reduce speculation and volatility,” he stated.
The economist noted that initiatives such as crude-for-naira deals and structured fuel imports could offer temporary relief if properly implemented. However, he stressed that such arrangements must reflect market realities and avoid becoming another form of hidden subsidy. “These mechanisms can serve as short-term shock absorbers, but must be transparent, time-bound, and efficiently implemented. Most importantly, any cost savings must translate into lower pump prices for Nigerians,” he added.
Iledare emphasised that a liberalised market still requires strong government oversight to ensure fairness and protect vulnerable citizens. “A deregulated market is not a lawless market. Government must provide credible regulation, enforce competition, and deliver targeted social protection, not blanket subsidies that distort pricing and strain public finances,” he said.
He highlighted domestic refining as crucial to energy resilience, citing the Dangote Refinery and modular refineries as key to reducing fuel imports. However, he cautioned against reliance on a single supply source, urging a contestable market where imports remain viable. “Local refining is essential, but must operate competitively. Keeping import options open prevents dominance and reduces risks of supply disruption from a single point of failure,” he explained.
Turning to the industrial sector, Iledare warned that rising diesel prices threatened manufacturing output and productivity across Nigeria. Many industries depend heavily on diesel for power, making them vulnerable to sustained price increases. He urged targeted interventions, including temporary tax relief on energy inputs, improved gas-to-power supply, and better logistics infrastructure. “These measures can support manufacturers without undermining ongoing market reforms,” he added.
The expert concluded that policymakers must balance supply stability, competition, and consumer relief without reversing critical reforms in Nigeria’s petroleum sector. His advice comes as global oil price volatility continues to test the resilience of Nigeria’s downstream market and the effectiveness of recent policy changes.
