The Presidency has dismissed claims by former Anambra State governor and Labour Party presidential candidate, Mr. Peter Obi, that Nigeria’s rising petrol prices are largely due to the absence of a strategic petroleum reserve, describing the argument as inaccurate and based on a misunderstanding of global energy market dynamics.
Responding to Obi’s remarks, the Special Assistant to the President on Social Media, Mr. Olusegun Dada, said the recent increase in petrol prices is primarily the result of market forces following the deregulation of the petroleum sector by the administration of President Bola Ahmed Tinubu.
In a statement posted on his X (formerly Twitter) handle, Dada explained that in a deregulated market environment, fuel prices are influenced by several global factors, including crude oil prices, exchange rates, shipping costs and supply risks.
According to him, the removal of fuel subsidy has allowed market realities to determine pump prices, meaning developments in the international oil market now directly affect domestic fuel costs.
“In a deregulated system, petrol prices respond directly to global oil prices, exchange rates, shipping costs and supply risks,” Dada said.
He noted that geopolitical tensions involving Iran have recently contributed to an increase in global oil prices, adding that such developments inevitably affect countries like Nigeria that rely heavily on imported refined petroleum products.
So when geopolitical tensions involving Iran push global oil prices upward, countries that rely heavily on imported refined products like Nigeria will inevitably feel the effect at the pump,” he stated.
The presidential aide also rejected suggestions that establishing a strategic petroleum reserve would automatically stabilise or control everyday pump prices.
According to him, even countries with large strategic petroleum reserves maintain them primarily for emergency situations such as wars, embargoes or major supply disruptions, rather than for routine price management.
Dada pointed out that Nigeria’s long-standing energy challenge is largely structural, particularly the country’s limited domestic refining capacity and its heavy dependence on imported refined products despite being a major crude oil producer.
He said this imbalance, combined with pressure on the foreign exchange market, has historically exposed Nigeria to fluctuations in global oil prices.
The presidential aide added that long-term energy planning should focus on expanding domestic refining capacity, strengthening supply chains, stabilising the foreign exchange environment and maintaining consistent energy policies.
