Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has urged the Federal Government to reduce the price of Premium Motor Spirit (PMS). He made the call in a statement issued under the aegis of the Alliance on Surviving COVID-19 and Beyond (ASCAB) on October 4, 2026. Falana highlighted the impact of the ongoing conflict between the United States and Iran on global crude oil supply. Disruptions to shipments through the Strait of Hormuz have pushed crude oil prices above $100 per barrel.
According to Falana, the uncertainty surrounding the conflict could prolong instability in global energy markets. He referenced a recent ASCAB seminar on the state of the nation, where a United States-based petroleum expert, Prof. Izielen Agbon, presented an analysis of Nigeria’s fuel pricing structure. Agbon argued that the concept of fuel subsidy in Nigeria was based on “manipulated production methods and accounting statistics.” He advocated adopting a Production Cost Pricing (PCP) model that accounts for domestic production, refining, transportation, and distribution costs.
Agbon stated that the cost of producing crude oil in Nigeria ranged from $31 to $48 per barrel, compared with a global average of $12 per barrel. He attributed the higher cost to factors including ageing infrastructure, insecurity, oil theft, and reliance on imported inputs. Based on these figures and an exchange rate of N1,333 per dollar, he estimated petrol prices would range between N435 and N687 per litre.
Falana also referred to measures taken by other countries to cushion the effects of rising energy costs. The G7 countries had decided to release 100 million barrels of crude oil and diesel from emergency reserves to stabilise prices. He expressed concern about the state of Nigeria’s refineries, noting that despite previous announcements by the Nigerian National Petroleum Company Limited (NNPC Ltd) about the resumption of operations at the Port Harcourt and Warri refineries in December 2024.
Falana maintained that the Federal Government had the capacity to reduce petrol prices by ensuring that crude oil allocated for domestic consumption is refined locally. A benchmark of 450,000 barrels per day had been set aside from Nigeria’s equity crude to supply local refineries. He called on the government to direct NNPC Ltd to refine this volume domestically and make petroleum products available to Nigerians at more affordable prices.
The human rights lawyer emphasized that Nigerians should not pay more for petrol than consumers in oil-producing regions such as Texas. He criticised the use of the Import Parity Price (IPP) model, which assumes that petroleum products consumed in Nigeria are imported, despite the country’s status as a crude oil producer.
Falana’s call comes as the global oil market continues to experience disruptions. The ongoing conflict between the United States and Iran has resulted in higher crude oil prices, which have implications for economies worldwide. The Federal Government’s response to Falana’s call remains unclear.
Key points
- Femi Falana urges the Federal Government to reduce petrol prices citing rising global oil prices.
- A United States-based petroleum expert, Prof. Izielen Agbon, presented an analysis of Nigeria’s fuel pricing structure.
- The G7 countries had decided to release 100 million barrels of crude oil and diesel from emergency reserves to stabilise prices.
