A veteran labour leader and oil and gas practitioner, Comrade Mustapha Nuhu Wali, has called for a fundamental overhaul of Nigeria’s petroleum pricing system, proposing a stabilisation fund to shield consumers from sudden increases in petrol prices.Wali said the proposed mechanism should not be viewed as a return to the former subsidy regime, but as a temporary buffer that would operate alongside measures designed to permanently reduce the cost of producing, transporting and distributing petroleum products.
He made the proposal in a policy document titled, “Beyond Petroleum Subsidy: A Petroleum Price Moderator and Downstream Transformation Framework for Nigeria,” which was made available to newsmen in Kano.
The document recommends the establishment of a Petroleum Price Moderator (PPM) within a transparent price corridor.
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Wali proposed that part of the gains recorded during periods of favourable international crude oil and petroleum product prices should be channelled into a ring-fenced reserve.
The reserve, he explained, could then be deployed when international prices rise beyond predetermined thresholds to cushion consumers from exceptional and temporary shocks.
“This is not a return to the old subsidy regime. It is a counter-cyclical stabilisation mechanism designed to protect consumers from exceptional shocks while Nigeria tackles the structural causes of high petroleum costs,” he said.
Rather than concentrating solely on the amount government should spend to reduce petrol prices, Wali said policymakers must examine the factors responsible for the high cost of petroleum products from source to consumer.
He therefore called for a forensic examination of the petroleum pricing template, covering crude supply, refining, freight, foreign exchange, financing, pipelines, storage, depots, transportation and distribution.
The exercise, according to him, should establish which costs are unavoidable and which can be reduced, eliminated or subjected to stronger regulatory control.
Wali also advocated a more predictable crude supply arrangement for qualified domestic refineries.
He said such refineries should have access to crude under clear commercial rules covering allocation, pricing, delivery, quality, measurement, dispute resolution and penalties for non-performance.
While acknowledging that domestic crude oil was not free, he argued that the elimination of avoidable freight, handling and other logistics expenses should produce transparent savings in the final commercial structure.
Another major component of his proposal is the revival and professional management of Nigeria’s petroleum infrastructure.
Wali identified pipelines, storage facilities and depots as critical areas requiring investment if the country is to reduce its dependence on long-distance transportation and multiple handling of petroleum products.
He specifically proposed that the Nigerian Pipeline and Storage Company Limited (NPSC), within the NNPCL structure, be repositioned as a professionally managed national petroleum infrastructure operator.
Under the proposed model, qualified participants in the petroleum market would have transparent and non-discriminatory access to strategic infrastructure.
“Ownership ≠ monopoly access,” Wali said, maintaining that efficient infrastructure would help lower logistics costs and improve the reliability of petroleum distribution.
On Nigeria’s refineries, he called for independent technical and commercial assessments to determine their viability.
Where viable, he proposed partnerships involving competent private investors, international refinery operators, technical firms, infrastructure investors and development finance institutions.
He said the management and operational control of such facilities should be determined by capital commitment, technical competence and measurable performance, rather than political considerations.
Wali also proposed greater participation by international oil companies and upstream producers in domestic refining and energy security through a structured framework covering refinery investment, rehabilitation, technical operations, crude supply, storage, pipelines, financing and technology transfer.
He further suggested that excess funds accumulated in the stabilisation reserve, after an agreed threshold had been attained, could be deployed as repayable financing for viable downstream infrastructure.
Such financing, he said, could potentially attract single-digit interest rates where financially and legally feasible.
Among the projects he identified as priorities are pipelines, storage facilities, petroleum depots, LPG infrastructure, strategic petroleum reserves, refinery rehabilitation, terminals and product evacuation facilities.
Wali said the approach would allow government to move beyond repeatedly spending money to manage petrol prices and instead invest in infrastructure capable of lowering petroleum costs over the long term.
“This way, Nigeria will not simply spend money to reduce today’s petrol price. We will invest in reducing tomorrow’s petroleum cost,” he said.
He said the ultimate objective should be to transform Nigeria from an import-dependent petroleum market into a competitive regional refining and petroleum supply hub.
Wali argued that increased refining capacity, dependable crude supply and efficient distribution infrastructure would position Nigeria to supply petroleum products to other West African countries, while generating jobs, export opportunities and greater regional energy security.
He stressed that the proposal was non-partisan and was not an endorsement of any political party or presidential candidate.
According to him, the policy framework has been made available for consideration by presidential candidates and national policymakers ahead of the 2027 general elections.
Wali challenged political leaders to present Nigerians with a sustainable petroleum pricing and downstream industrialisation strategy that goes beyond subsidy and short-term political interventions.
“What is your sustainable petroleum pricing and downstream industrialisation model for Nigeria beyond subsidy and short-term political interventions?” he asked.
He maintained that the country’s long-term solution was not to subsidise inefficiency but to invest in removing the inefficiencies responsible for high petroleum costs.