Agagbo Urges Tinubu to Subsidize Crude Supply to local Refineries Amid Global oil Tensions

Security consultant and public affairs analyst Dr. Johnson Ikporho Agagbo has called on President Bola Ahmed Tinubu to urgently subsidize crude oil supply to domestic refineries as rising geopolitical tensions threaten Nigeria’s energy security and economic stability, April 3, 2026.

Agagbo, writing as a concerned citizen, warned that escalating hostilities involving Iran, the United States and Israel have pushed the global oil market into extreme volatility, with potentially severe consequences for Nigeria despite its status as an oil-producing nation.

He said the intensifying conflict has raised fears of disruptions to critical supply routes such as the Strait of Hormuz — through which about 20% of the world’s oil flows — leading to soaring insurance costs for tankers and projections that crude prices could rise to between $120 and $150 per barrel in the coming weeks.

“For Nigeria, this is not merely a foreign policy concern; it is a direct threat to our national survival, economic sovereignty and national security,” Agagbo wrote.

Pressure on Nigerians

Agagbo warned that if local refineries continue to purchase crude at international market rates, the cost burden will be transferred to consumers already grappling with inflation. He projected that petrol prices could surge to between ₦1,500 and ₦2,000 per liter, worsening living conditions across the country.

He emphasized that Nigeria’s heavy reliance on petroleum products for transportation and industrial activity makes it particularly vulnerable to global shocks, adding that waiting for the conflict to subside is not a viable option.

Call for targeted subsidy

Rather than reintroducing broad fuel subsidies, Agagbo proposed a more targeted approach — subsidizing crude oil supplied to domestic refineries, including the Dangote Refinery and other modular plants.

He argued that forcing local refineries to buy crude at global prices effectively mirrors fuel importation under a different structure, undermining the benefits of domestic refining.

By contrast, selling crude to local refineries at discounted rates and in naira would help stabilize fuel prices at filling stations, even as global markets fluctuate.

“This is a smarter, more targeted and efficient way to stabilize the economy than subsidizing imports,” he wrote.

Naira stability and forex relief

Agagbo also highlighted the pressure on Nigeria’s currency, noting that continued reliance on foreign exchange for crude purchases exposes the naira to further depreciation amid global uncertainty.

A naira-based crude supply system, he said, would reduce demand for U.S. dollars in the downstream sector and help stabilize the currency.

“This creates a closed-loop system where crude is paid for in naira, refined locally and sold at stable prices,” he explained.

Protecting strategic investments

The analyst warned that without intervention, major investments in Nigeria’s refining sector — particularly the multibillion-dollar Dangote Refinery — could be at risk if operators are unable to afford crude feedstock.

He cautioned that refinery shutdowns would reverse recent progress, forcing Nigeria back into full dependence on fuel imports and exposing the country to supply disruptions linked to the Middle East crisis.

“This would leave us vulnerable and turn these investments into economic liabilities,” he said.

Proposed implementation framework

Agagbo outlined a three-part strategy for the federal government and the Nigerian National Petroleum Company Limited:

Establish a “national energy security” pricing window allocating 300,000 to 450,000 barrels of crude daily to local refineries at below-market rates.
Mandate that transactions under the scheme be conducted entirely in naira.
Introduce a price cap on refined products in exchange for subsidized crude supply.

He said the cost difference between global and subsidized crude prices should be treated as a national security expenditure within the federal budget.

A shift from past policy

While acknowledging the Tinubu administration’s decision to remove fuel subsidies in 2023, Agagbo argued that current global conditions require a different policy response.

“We are facing a man-made global energy crisis driven by war,” he said, warning that market forces alone cannot address the situation.

He added that failure to act could lead to long fuel queues, rising transportation costs and a renewed surge in inflation, potentially eroding gains from recent economic reforms.

Urgent call for action

Invoking a local proverb — “He who lives by the riverside does not wash his hands with spittle” — Agagbo urged the government to leverage Nigeria’s oil resources to protect its citizens during the crisis.

He called on the president, the Federal Executive Council and key economic and petroleum officials to act swiftly to secure the nation’s energy future.

“We must use our own crude to protect our own people,” he wrote.