FORMER LABOUR LEADER PROPOSES OIL RESERVE TO CUSHION PETROL PRICE SHOCKS

A former labour leader and oil and gas practitioner, Mustapha Wali, has called for the establishment of a petroleum price moderator and a dedicated stabilisation reserve to protect Nigerians from sharp increases in petrol prices caused by fluctuations in global crude oil prices. Wali made the proposal in a policy document titled “Beyond Petroleum Subsidy: A Petroleum Price Moderator and Downstream Transformation Framework for Nigeria.”

Wali, a former National Vice President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, said the proposal was different from the previous petrol subsidy system. He suggested that funds should be saved when international oil prices are favourable and deployed when prices rise beyond predetermined levels, while the government works on reducing the structural costs associated with producing and distributing petroleum products.

He also called for a forensic review of the existing petroleum pricing template, covering crude supply, refining, foreign exchange, freight, financing, storage, pipelines, transportation and distribution. According to him, the review should identify costs that are unavoidable and separate them from those that could be reduced through regulation, better management or improved infrastructure.

Wali further proposed a predictable system for supplying crude oil to qualified domestic refineries, with clear rules covering allocation, pricing, delivery obligations and quality standards. He said greater use of locally supplied crude could reduce some freight, handling and logistics expenses. He also recommended transforming the Nigerian Pipeline and Storage Company into a professionally managed national petroleum infrastructure operator.

The former labour leader said part of the stabilisation reserve could eventually be used as repayable financing for commercially viable downstream projects, including pipelines, storage facilities, depots, LPG projects and refinery rehabilitation. He also urged oil companies and other upstream producers to invest more directly in Nigeria’s downstream sector, arguing that the long-term objective should be to reduce dependence on imported petroleum products and strengthen Nigeria’s position as a regional refining and supply hub.