Energy Crisis: LCCI Urges FG to Enforce PIA’s Stipulated 300,000 barrels Crude Oil Allocation to Local Refineries

Dike Onwuamaeze

Lagos Chamber of Commerce and Industry (LCCI) has tasked the federal government and Nigerian National Petroleum Company Limited to implement the domestic crude supply obligations under the Petroleum Industry Act (PIA) by ensuring consistent allocation of more than 300,000 barrels per day of crude oil to local refineries, particularly, Dangote Refinery.

LCCI expressed the view yesterday in a public statement on rising oil prices, adding that petrol pump prices are trending towards N1,500/litre.

Director-General of LCCI, Dr. Chinyere Almona, who signed the statement, said, “The federal government and the Nigerian National Petroleum Company Limited must urgently enforce domestic crude supply obligations under the Petroleum Industry Act, ensuring consistent allocation of more than 300,000 barrels per day to local refineries, particularly the Dangote Refinery.

“This should be complemented by a transparent and scalable naira-for-crude framework to reduce FX exposure, lower production costs, and stabilize output.”

Almona stated, “At the regulatory level, the Nigerian Midstream and Downstream Petroleum Regulatory Authority should implement a clear, rules-based pricing framework that reflects verifiable cost fundamentals while preventing abuse of market dominance without undermining deregulation.

“Simultaneously, the government must accelerate the operationalisation of other licensed and modular refineries to reduce concentration risk, while maintaining strategic imports as a short-term buffer to stabilise prices.

“Addressing binding constraints, especially FX volatility, logistics inefficiencies, and distribution bottlenecks, remains critical to improving market efficiency.”

She said the current oil price shock was a decisive stress test of Nigeria’s energy and economic architecture.

Almona stated, “LCCI maintains that sustainable fuel price moderation will not be achieved through administrative controls, but through structural reforms that expand domestic supply, foster competition, and reinforce transparency across the value chain.

“With disciplined execution and strong public-private collaboration, Nigeria can turn this challenge into a catalyst for building a more resilient, competitive, and self-sufficient energy ecosystem, firmly positioning the country and the wider West African region for long-term stability and growth.”

The LCCI director-general said beyond securing the country’s fuel needs, “We expect the government to work towards a holistic restructuring of the oil and gas sector to enable Nigeria to become an alternative oil and gas supplier to other African countries and Europe.

“With the ongoing crises in the Gulf region, European and Asian countries are seeking new deals from new regions as an alternative.

“We must look ahead to proactively position ourselves as a veritable alternative to oil and gas supplies from Russia and the Gulf region.”

LCCI stated that the surge in global crude oil prices, to about $112 per barrel, was intensifying pressure on the Nigerian downstream petroleum segment and rapidly transmitting inflationary shocks across transportation, food, and industrial production.

According to Almona, the fourth upward review of Dangote Refinery’s gantry price to approximately N1,245/litre, signalled intensifying pressure in Nigeria’s downstream market, with pump prices trending towards N1,500/litre.

She said, “This development is rapidly transmitting inflationary shocks across transportation, food, and industrial production.”

Almona added, “LCCI underscores that this persistent fuel affordability challenge is fundamentally a reflection of a structural supply deficit, where Nigeria’s daily petrol demand of over 50–53 million litres continues to outpace effective domestic refining capacity, thereby amplifying price pressures as supply becomes increasingly concentrated.

“In this context, government intervention must be anchored on strategic market stabilisation rather than price suppression.”

She said the immediate priorities should include targeted, time-bound support for critical sectors, such as transportation, agriculture, and SMEs to mitigate inflationary spill overs, while avoiding inefficient blanket subsidies.

Almona said, “More critically, stabilising the Naira through improved FX liquidity and policy coordination is essential, given the strong exchange-rate pass-through into fuel pricing.

“The government must also signal policy clarity and consistency to reinforce investor confidence in the deregulated regime.”

The LCCI director-general explained that while higher crude prices typically implied fiscal upside, Nigeria’s benefits remained constrained by production limitations and structural inefficiencies.

She called for “urgent action to boost crude production specifically to feed our local refineries, which, in turn, will help adequately supply the local economy”.