Fuel Price Hike: Reserve Not Solution, Presidency Counters Obi

The Presidency has dismissed assertions by former governor of Anambra State and former Labour Party presidential candidate, Peter Obi, that Nigeria’s rising petrol prices are primarily due to the absence of a strategic petroleum reserve.

The Presidency described the claim as inaccurate and reflective of a misunderstanding of global energy market dynamics.

Peter Obi had on Thursday blamed Nigeria’s rising fuel costs on the absence of a strategic petroleum reserve and what he described as insufficient government planning.

In a statement published on his social media handle, Obi highlighted the recent spike in domestic fuel prices. He noted that petrol, which sold for less than N1,000 per litre just weeks ago, has now climbed above N1,200 per litre. Diesel prices, he added, have risen from below N1,000 to over N1,500 per litre.

Obi linked the sharp increases to geopolitical tensions involving Iran, which, he said, have pushed global oil prices higher and exposed Nigeria’s vulnerability due to its dependence on imported refined products.

“The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks.

“This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilize supply,” Obi wrote.

Responding to Obi’s remarks, the Special Assistant to the President on Social Media, Olusegun Dada, attributed the recent surge in pump prices to market forces following the deregulation of the petroleum sector under President Bola Ahmed Tinubu.

In a statement shared via his X handle on Saturday, March 14, Dada explained that in a deregulated system, “fuel prices respond directly to global oil prices, exchange rates, shipping costs and supply risks.”

He noted that the removal of fuel subsidies means that domestic prices now mirror international market realities, making Nigeria sensitive to fluctuations in global oil markets.

He also rejected the notion that establishing a strategic petroleum reserve would automatically stabilise everyday fuel costs, noting that even countries with large reserves maintain them mainly for emergencies, such as wars, embargoes, or major supply disruptions.

According to Dada, Nigeria’s persistent energy challenges are structural, stemming from limited domestic refining capacity and a reliance on imported refined petroleum despite the country’s status as a major crude oil producer.

He added that this dependency, coupled with pressure on the foreign exchange market, exposes Nigeria to global price volatility.

Olusegun’s statement reads: “Dear Mr @PeterObi,

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“Allow me to educate you and save you from the continuous ignorance you dwell in in regards to critical matters.

“The recent rise in fuel prices in Nigeria is not primarily because the country lacks a strategic petroleum reserve. The more immediate factor is that the fuel market is now largely deregulated following the subsidy removal by the administration of Bola Ahmed Tinubu.

“In a deregulated system, petrol prices respond directly to global oil prices, exchange rates, shipping costs, and supply risks. 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. That is simply how an open market behaves.

“It is also not accurate to suggest that strategic petroleum reserves are tools used to control everyday pump prices. Even countries with very large reserves, such as the United States and China, maintain them primarily for serious supply emergencies, wars, embargoes, or major disruptions to global supply chains. They are not routinely deployed simply because prices move in the global market.

“Nigeria’s real challenge has always been deeper and more structural. For decades, the country has struggled with limited refining capacity and a heavy dependence on imported refined products, despite being one of the world’s major crude oil producers. That structural imbalance, combined with exchange rate pressures has consistently made the country vulnerable to global price movements.

“So yes, planning matters. But reducing the entire issue to “Nigeria failed to plan because it does not have a strategic reserve” completely misses the broader reality. Real planning would involve expanding domestic refining capacity, strengthening supply chains, stabilizing the foreign exchange environment, and maintaining consistent energy policies.

“It is worth reminding you that during your presidential campaign, you clearly stated that you would remove fuel subsidy if elected.
So the same policy framework that now allows prices to reflect market realities is one you publicly supported.

“More importantly, this is where it becomes clear that the issue is not just the argument but the understanding behind it. When someone who once held the office of governor begins to make such sweeping conclusions about a complex global energy market, it is frankly embarrassing. A former governor should know better than to reduce a multi-layered economic issue to a simplistic talking point.

“Sometimes the wiser thing to do is simply sit a conversation out when one does not fully understand how the system works rather than jumping at every opportunity to malign Nigeria as this has been your M.O(Modus Operandi). It would save both the country and the speaker from unnecessary embarrassment.”