The Federal Government has raised a red flag over the growing instability in the global oil market, warning that Nigeria’s economy is at significant risk due to the sharp decline in oil prices and disruptive trade policies spearheaded by former U.S. President Donald Trump.
At a media briefing in Abuja on Tuesday, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, disclosed that erratic shifts in international oil prices—triggered largely by Trump’s revived tariff regime—are having adverse effects on Nigeria’s already fragile revenue base.
“As consumers, we are happy that the price is coming down, but as a nation, it’s not good for our economy because our revenue inflow is also impacted,” Ahmed stated at the Presidential Communications Team’s ‘Meet the Press’ session at Aso Rock Villa.
Nigeria’s economy, which depends on oil exports for over 85 percent of foreign exchange earnings and more than half of government revenue, has been severely hit by the recent oil price plunge. A striking example cited by Ahmed was the drop in global crude prices from $73 to $60 per barrel in a single day—a development that instantly slashed national income from oil sales.
Further worsening the situation is Nigeria’s declining oil production, which now stands at about 1.4 million barrels per day, according to recent OPEC data. This is far below the 1.8 million bpd target set in the 2024 budget.
“If we lose the price by $10, you can see the negative impact on our economy, national reserves, and the strength of our naira,” Ahmed cautioned.
Adding a layer of complexity to the global energy crisis are the trade policies introduced by Donald Trump, who is campaigning for re-election on a protectionist platform. His reimposition of tariffs on China and threats of duties on several other countries have sent shockwaves through global markets.
Ahmed described Trump’s policy shifts as inconsistent and unpredictable, making it difficult for oil-exporting countries like Nigeria to plan effectively. “The crude oil and petrol products market continues to have a downward trajectory because of these inconsistencies,” he said.
According to him, investors are now resorting to short-term trading strategies to hedge against market shocks, a reflection of deep-seated global uncertainty.
Despite recent progress in local refining and supply efforts, the NMDPRA chief stressed that Nigeria’s petroleum product demand and supply dynamics remain a source of concern. Ahmed revealed that petrol imports dropped significantly—from 44.6 million litres per day in August 2024 to just 14.7 million litres by mid-April 2025.
This sharp decline in imports coincided with a 670 percent increase in local production, spurred by the partial resumption of operations at the Port Harcourt Refinery and increased output from modular refineries such as Waltersmith, OPAC, and Aradel.
Yet, the national supply has only exceeded the 50 million litres per day consumption benchmark twice in eight months—once in November and again in February.
The Dangote Refinery, which currently contributes about 40 percent of national supply, has seen its daily output fall from 22 million litres in February to 18 million litres in April.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) has completely ceased supply since February, after its volumes fell steadily from 24 million litres per day in October 2024 to just 1 million litres in January.
Nigeria’s refining sector is undergoing a critical transformation. Ahmed revealed that six licensed private refineries now account for a combined capacity of 679,500 barrels per day. The Dangote complex leads this category with its massive 650,000 bpd single-train facility.
Four public refineries managed by NNPCL—including Port Harcourt (new and old), Warri, and Kaduna—contribute an additional 445,000 bpd, though actual output remains far below installed capacity.
To support expansion efforts, the NMDPRA has issued 47 licences to establish (LTEs) for 1.75 million bpd and 30 licences to construct (LTCs) with a combined capacity of 1.23 million bpd. However, only four plants currently operate, delivering a modest 27,000 bpd.
Ahmed noted that five LTC projects with a total capacity of 689,500 bpd, including Dangote and AIPCC Energy’s 30,000 bpd plant, are in commissioning or construction stages.
Ahmed warned that Nigeria must brace for prolonged volatility in oil prices and global trade disruptions. “This volatility will continue. Even yesterday, President Trump again exempted some sectors from tariffs, like vehicular components, and you saw the market rebound immediately,” he said.
He called for resilience, strategic planning, and accelerated diversification of the economy to reduce dependence on oil revenues.
As the global oil landscape evolves under political and economic pressures, Nigeria’s vulnerability remains stark. Without stable oil prices and production levels, the country’s fiscal health and currency strength are poised