Dada Olusegun, Special Assistant to President Bola Tinubu on Social Media, has criticised Labour Party’s 2023 presidential candidate, Peter Obi, over his comments on the recent increase in fuel prices in Nigeria.
Olusegun made the remarks in a post on X on Saturday, responding to a statement issued by Obi on Thursday in which the former Anambra State governor attributed the country’s vulnerability to global oil price shocks to the absence of a strategic petroleum reserve and poor government planning.
The exchange comes amid rising fuel prices in Nigeria, which Obi linked to global oil market tensions involving Iran and their effect on international crude prices.
What the presidential aide is saying
Olusegun dismissed Obi’s explanation for the rising fuel prices, arguing that the key driver is the deregulation of Nigeria’s fuel market following the removal of fuel subsidy.
- “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.”
Olusegun also argued that strategic petroleum reserves are not typically used to control routine pump price movements in global energy markets.
Backstory
In his earlier statement, Obi had highlighted the recent increase in domestic fuel prices and attributed the development to Nigeria’s lack of buffers against global supply disruptions.
- He noted that petrol prices had risen from below N1,000 per litre a few weeks ago to above N1,200 per litre.
- Diesel prices also increased from below N1,000 per litre to over N1,500 per litre.
- Obi argued that many countries maintain strategic petroleum reserves to cushion supply disruptions and stabilise markets during global shocks.
- According to him, the absence of such reserves exposes Nigeria to immediate impacts whenever global oil prices rise.
Obi also stated that countries that engage in strategic planning typically create buffers against economic shocks, while those that fail to plan remain vulnerable.
More insights
Olusegun countered that even countries with large strategic petroleum reserves do not deploy them regularly to influence market prices.
- He cited countries such as the United States and China as examples of nations that maintain large reserves.
- According to him, these reserves are primarily used for emergency supply disruptions such as wars, embargoes or major global supply chain breakdowns.
- They are not typically released in response to routine price fluctuations in global oil markets.
- He said interpreting strategic reserves as tools for managing everyday fuel prices misrepresents their primary purpose.
What you should know
Nairametrics earlier reported that residents of the Federal Capital Territory (FCT) have raised concerns over rising transport fares following the recent increase in the pump price of petrol across the country.
- Fuel price increases have historically triggered wider inflationary pressures in Nigeria, particularly in transportation and food markets.
Recently, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said fluctuations in fuel pump prices are a direct result of market dynamics under Nigeria’s deregulated downstream petroleum sector.
