Professor Yemi Oke, SAN, a Professor of Energy and Electricity Law at the University of Lagos, has weighed in on Nigeria’s energy crisis, emphasising the need for deregulation to drive competition within the downstream sector. Speaking on the current fuel pricing and challenges in the energy market, he outlined the importance of market dynamics and the impact of the Petroleum Industry Act.
Professor Oke stated this in an exclusive interview on Arise TV on Monday October 14, saying: “Deregulation is meant to foster competition and provide a better environment for the downstream sector, but ordinary Nigerians are concerned about rising inflation and the increased cost of living. Many ask why we should pay more for something that flows in our own backyard when crude oil belongs to us all,” Oke said.
He highlighted the previous inefficiencies under the Nigerian National Petroleum Corporation (NNPC), noting that the entity was both a regulator and a player in the sector, creating a monopoly that stifled competition. “The old NNPC was a conflicted entity, controlling crude, refining, and sales. It took 15 years to transition from the Petroleum Act to the Petroleum Industry Act, opening up the market to private players,” he said.
Oke gave examples of international oil companies like Saudi Aramco and Brazil’s Petrobras, showing how they have significantly contributed to their countries’ GDP. He stressed that Nigeria needs a strong petroleum sector that adds value to the economy, not one that takes from it.
Despite deregulation, Nigeria is still one of the cheapest nations for petroleum products, with current prices in Nigeria averaging around 62 cents per litre compared to global averages of $1.87 per litre. “Other oil-producing countries sell petroleum almost at a giveaway price, but we are just starting to do things right in Nigeria. It’s painful but necessary,” he remarked.
Addressing the question of local refineries and their impact on pricing, Oke acknowledged the need for more local refining capacity. “We commend Dangote’s investment, which was thought impossible at the time. Now we see interest from other players like BUA, and I believe things will improve,” he added.
The Don finally noted that deregulation will bring higher prices in the short term but create a more sustainable petroleum sector in the long term. “Nigerians must brace for higher prices, but with local refineries and more competition, we can expect better outcomes in the future.”
