By: Tijani Salako.

The Lagos Chamber of Commerce and Industry (LCCI) has raised alarm over rising fuel prices in Nigeria, warning that escalating global crude oil prices, currently around $112 per barrel, combined with the fourth upward review of Dangote Refinery’s gantry price to approximately ₦1,330 per litre, could push pump prices toward ₦1,500 per litre, urge government for urgent intervention.

The chamber said this trend poses significant risks to transportation, food supply, industrial production, and the broader economy.

In a detailed statement signed by LCCI Director General Dr. Chinyere Almona, the chamber described the situation as a reflection of a persistent structural supply deficit in Nigeria’s petroleum sector. “Nigeria’s daily petrol demand of 50–53 million litres continues to outpace effective domestic refining capacity, concentrating supply and driving price pressures across the downstream market,” the statement noted.

LCCI emphasized that the ongoing fuel price surge is not merely a temporary market fluctuation but a structural challenge. With domestic refineries unable to meet national demand, the country remains heavily reliant on imports, exposing fuel prices to global market volatility and foreign exchange fluctuations.

“Persistent fuel affordability challenges are fundamentally a reflection of a structural supply deficit, highlighting that price increases are rapidly transmitting inflationary shocks across multiple sectors, from transport and agriculture to manufacturing and logistics.”

The chamber urged the federal government to implement strategic market stabilization measures rather than blanket subsidies or price controls, which it described as inefficient. LCCI recommended that critical sectors such as transportation, agriculture, and small- and medium-sized enterprises (SMEs) to mitigate immediate inflationary impacts. Stabilizing the naira through improved foreign exchange liquidity and coordinated monetary policies was highlighted as essential to reducing fuel cost pressures.

“Given the strong exchange-rate pass-through into fuel pricing, policy clarity and consistency are essential to reinforce investor confidence in the deregulated regime,” the chamber said.

While rising crude oil prices could theoretically boost Nigeria’s fiscal revenues, LCCI warned that structural inefficiencies and production limitations are constraining these potential gains. The dominant effect, the chamber said, is adverse: cost-push inflation intensifies, industrial competitiveness weakens, and household purchasing power declines. Energy costs, being a major component of production and logistics, continue to erode business margins and dampen economic growth, reinforcing broader macroeconomic vulnerabilities.

LCCI called for urgent measures to increase crude supply to local refineries, particularly the Dangote Refinery, to ensure adequate domestic production. The chamber further urged the Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) to enforce domestic crude supply obligations under the Petroleum Industry Act, ensuring consistent allocation of over 300,000 barrels per day to local refineries.

Furthermore implementing a transparent and scalable naira-for-crude framework to reduce foreign exchange exposure, lower production costs, and stabilize output. At the regulatory level, LCCI called for a clear, rules-based pricing framework from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, reflecting verifiable cost fundamentals while preventing market abuse.

To reduce concentration risk, LCCI admonished the government to accelerate operationalization of other licensed and modular refineries while maintaining strategic imports as a short-term buffer. Addressing binding constraints, particularly FX volatility, logistics inefficiencies, and distribution bottlenecks, remains critical to improving market efficiency and ensuring fuel affordability.

Framing the current oil price shock as a stress test of Nigeria’s energy and economic architecture. Dr. Almona stressed that sustainable fuel price moderation will only be achieved through structural reforms that expand domestic supply, foster competition, and reinforce transparency across the value chain. Beyond meeting domestic fuel needs, LCCI called for a holistic restructuring of the oil and gas sector to position Nigeria as a credible alternative supplier for African and European markets.

“With ongoing crises in the Gulf region, European and Asian countries are seeking new deals from alternative regions. Nigeria must proactively position itself as a veritable alternative to oil and gas supplies from Russia and the Gulf,” Dr. Almona said.

The chamber concluded that with disciplined execution and strong public-private collaboration, Nigeria can turn the current energy challenge into a catalyst for building a resilient, competitive, and self-sufficient energy ecosystem, fostering long-term economic stability and growth in the West African region.