Global market turmoil, exacerbated by tumbling oil prices and unpredictable foreign trade measures, is putting significant strain on Nigeria’s economy, according to the nation’s petroleum regulatory authority.
Farouk Ahmed, who heads the Nigerian Midstream and Downstream Petroleum Regulatory Authority, expressed concern over the impact of volatile crude prices, warning that the trend is eroding government revenue at a time when national output remains subdued.
Speaking in Abuja at a media briefing, Ahmed explained that while lower fuel costs may provide short-term relief to consumers, the broader economic implications for an oil-dependent country like Nigeria are far from beneficial. He pointed to erratic foreign policies — particularly from the United States — as a major contributor to instability in the sector, citing sudden swings in oil prices as a symptom of deeper market uncertainty.
He highlighted a recent plunge in crude value from $73 to $60 per barrel within a 24-hour window as an example of the volatility hurting national earnings. According to him, inconsistent tariff policies from the U.S. — particularly under former President Donald Trump — have made it increasingly difficult for countries reliant on commodity exports to plan ahead.
The disruptions don’t end with external pressures. Nigeria is also grappling with internal issues such as declining production rates and vandalised pipelines. Recent figures from OPEC show the country’s daily output has slipped to around 1.4 million barrels, a significant drop compared to previous years.
Ahmed noted that uncertainty driven by erratic global trade decisions has made investors more risk-averse, leading to short-term, reactive trading patterns in the energy market. This has left oil prices especially vulnerable to sudden changes, frustrating efforts to stabilise the Nigerian economy.
Despite these headwinds, there are some signs of progress on the domestic front. Ahmed revealed that petrol imports have declined dramatically — from 44.6 million litres per day in August 2024 to 14.7 million in April 2025 — thanks in part to a ramp-up in local refining.
Local output has seen a more than sixfold increase, with refineries like Port Harcourt and modular plants contributing over 26 million litres daily. This marks a significant turnaround from last September, when local facilities were barely operational.
Even so, total national supply only exceeded the government’s 50 million-litre daily benchmark twice in recent months. While Dangote’s refinery has become a key player, delivering up to 22 million litres per day, state-run facilities like the Nigerian National Petroleum Company have scaled back, with some months registering no output at all.
Ahmed added that six licensed private refineries currently produce over 679,000 barrels per day, with Dangote’s complex alone handling 650,000. State-owned plants contribute a combined 445,000 barrels. Despite these figures, only a small portion of licensed facilities are fully operational, highlighting ongoing capacity issues.
The authority has also issued dozens of licences for future developments, with several large-scale builds — including Dangote’s — approaching completion. However, the sector remains vulnerable to the international price of oil, which continues to trend downward due to global instability.
Ahmed warned that unless these conditions improve, both in terms of domestic production stability and foreign trade consistency, Nigeria’s revenue outlook will remain precarious.
