Domestic Refining Won't Lower Petrol Prices, CPPE Warns

The Centre for the Promotion of Private Enterprise (CPPE) has warned that domestic refining alone will not significantly lower petrol prices in Nigeria, especially with global crude oil prices exceeding $100 per barrel. In a policy brief shared on Nairametrics, Dr. Muda Yusuf, the Chief Executive Officer of CPPE, emphasized that while enhancing domestic refining capacity could improve supply stability, it would still be heavily influenced by global crude oil market dynamics.

The CPPE noted a widespread belief that emerging domestic refineries would automatically lead to cheaper petrol prices; however, they pointed out that local refineries remain exposed to international crude oil price movements. Yusuf explained that crude oil is the main feedstock for refineries, and local operations cannot fully escape the impact of international price fluctuations.

Even when crude oil transactions are conducted locally, prices reflect global market values. The CPPE acknowledged that while domestic refining could provide several economic advantages, particularly in logistics and transport costs, it cannot completely shield the domestic fuel market from global price volatility.