Ex-Labour Leader Seeks Oil Buffer to Stabilise Petrol Prices

Former labour leader and oil and gas practitioner, Mustapha Wali, has called for the establishment of a petroleum price moderator and stabilisation reserve to cushion Nigerians from exceptional increases in global oil prices.

Wali, a former National Vice President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, made the proposal in a policy document titled Beyond Petroleum Subsidy: A Petroleum Price Moderator and Downstream Transformation Framework for Nigeria.

According to him, Nigeria needs a mechanism capable of absorbing global oil price shocks while the government addresses the structural factors driving the cost of petrol production and distribution.

He said the proposed stabilisation reserve would accumulate funds when international petroleum prices are favourable and deploy them when prices rise beyond predetermined thresholds.

Wali stressed that the proposal should not be interpreted as a return to the former petrol subsidy regime. Instead, he described it as a counter-cyclical mechanism designed to protect consumers from exceptional price shocks.

He also called for a comprehensive review of Nigeria’s petroleum pricing template, covering crude supply, refining, freight, foreign exchange, financing, pipelines, storage, depots, transportation and distribution.

The former labour leader argued that the review should identify costs that are unavoidable while eliminating excessive or unnecessary expenses through improved regulation.

Wali further proposed a predictable framework for domestic refineries to access crude oil, with clearly defined terms covering allocation, pricing, delivery obligations, quality standards and penalties for non-performance.

He also identified inadequate petroleum infrastructure as a major contributor to downstream costs and proposed transforming the Nigerian Pipeline and Storage Company into a professionally managed national petroleum infrastructure operator.

On refinery development, Wali called for independent technical and commercial assessments of the Nigerian National Petroleum Company Limited-owned refineries to determine which facilities remain economically viable for rehabilitation.

He also urged international oil companies and other upstream producers to invest more directly in refinery rehabilitation, crude supply, storage, pipelines and other downstream infrastructure.

Wali said the long-term objective should be to reduce Nigeria’s dependence on imported petroleum products and position the country as a regional refining and supply hub for West Africa.