A former senior labour leader, Mustapha Wali, has proposed the creation of a petroleum price stabilisation reserve to shield Nigerians from sharp increases in petrol prices caused by swings in global crude oil prices.
Wali, a former National Vice President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, presented the proposal in a policy document titled, ‘Beyond Petroleum Subsidy: A Petroleum Price Moderator and Downstream Transformation Framework for Nigeria.’
He said the mechanism would provide temporary relief when international oil prices rise sharply, while allowing the government to address the underlying costs responsible for high petrol prices.
Under the proposed framework, a ring-fenced reserve would accumulate funds during periods of favourable global oil prices. The money would then be deployed when crude prices rise above predetermined levels.
Wali stressed that the proposal should not be interpreted as a return to Nigeria’s former petrol subsidy system.
Rather, he described it as a counter-cyclical mechanism designed to manage exceptional price shocks without permanently subsidising petroleum consumption.
He also called for a comprehensive review of Nigeria’s petrol pricing structure, covering crude supply, refining, freight, foreign exchange, financing, pipelines, storage, transportation and distribution.
According to him, the review should separate unavoidable costs from expenses that could be reduced through regulation, improved efficiency or infrastructure investment.
Wali further proposed a clearly defined framework for supplying crude to eligible domestic refineries.
The framework, he said, should establish rules for crude allocation, pricing, delivery, quality control, measurement, dispute resolution and penalties for non-performance.
He argued that supplying crude locally could reduce some freight, handling and logistics expenses, although domestic crude would still have to be purchased commercially.
On infrastructure, Wali recommended converting the Nigerian Pipeline and Storage Company Limited into a professionally managed national petroleum infrastructure operator.
He also advocated transparent and non-discriminatory access to strategic pipelines and storage facilities for industry participants.
Wali said the government should conduct independent technical and commercial assessments of refineries owned by the Nigerian National Petroleum Company Limited to determine which facilities remain economically viable for rehabilitation.
Refineries considered viable, he added, should be opened to partnerships with private investors, international refinery operators, technical companies, infrastructure investors and development finance institutions.
He also urged international oil companies and other upstream producers to participate more actively in developing Nigeria’s downstream sector through investments in refining, crude supply, storage, pipelines, financing and technology.
The former labour leader proposed that any stabilisation reserve exceeding an agreed threshold could be used to provide repayable funding for commercially viable downstream projects.
Such projects could include pipelines, storage facilities, depots, liquefied petroleum gas projects, strategic petroleum reserves, terminals and refinery rehabilitation.
Wali said the approach would allow the government to use the reserve not only to cushion immediate petrol price increases but also to finance infrastructure capable of lowering petroleum costs over time.
He said Nigeria’s broader objective should be to reduce dependence on imported refined petroleum products and establish the country as a major refining and fuel supply hub for West Africa.
Wali also said his proposal was non-partisan and was intended to contribute to policy discussions ahead of the 2027 elections.
He urged political leaders and presidential candidates to present clear plans for achieving sustainable petrol pricing and downstream industrial development without depending on the former subsidy system or temporary government interventions.
