The Nigerian economy is facing significant risk due to the ongoing volatility in the global oil market, exacerbated by the shifting policies of US President Donald Trump, according to Farouk Ahmed, the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Speaking at a press briefing on Tuesday at the Presidential Villa in Abuja, Ahmed highlighted that although lower petroleum prices may seem beneficial to consumers, the economic impact on Nigeria is severe. “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,” he stated.
The CEO also criticized the unpredictability of US trade policies under President Trump, saying, “What is even destabilising the market is inconsistencies in the way the USA President Donald Trump also sends his policies. He moves today. Tomorrow, he reverses. So, it’s been challenging to predict the next level.” He noted that a recent drop in oil prices from $73 to $60 per barrel in just one day was an example of how such fluctuations are damaging to Nigeria’s oil revenue.
Further complicating the situation, Ahmed pointed to domestic issues such as pipeline vandalism and reduced oil production. “Most importantly, the challenges are compounded by domestic factors, like pipeline vandalism and reduced production,” he said. Recent reports from the Organisation of Petroleum Exporting Countries (OPEC) show that Nigeria’s oil output has dipped to approximately 1.4 million barrels per day.
Global economic instability has been worsened by Trump’s aggressive trade policies, including sweeping tariffs on goods from several nations, most notably China. These measures have injected uncertainty into global markets, with significant repercussions on oil prices. “Oil prices often dipped when tariffs were imposed, reflecting fears of a slowdown in global growth, while exemptions or rollbacks triggered temporary rebounds,” Ahmed explained.
This disruption is particularly challenging for oil-dependent economies like Nigeria, where economic stability relies on the predictability of oil prices. Ahmed explained that the market continues to experience a downward trajectory due to these inconsistent policies, which have lowered oil prices to below $50 per barrel. “The crude oil and petrol products market continues to have a downward trajectory because of these inconsistencies and policies,” he said.
Despite the challenges, Ahmed acknowledged the benefits of lower petroleum product prices for Nigerian consumers. However, he stressed the long-term negative impact on national revenue. He added, “When you look at it globally as a nation, it’s not good for our economy because our revenue inflow is also impacted.”
In terms of local production, Ahmed revealed that Nigeria’s daily imports of Premium Motor Spirit (PMS) have dropped by 67% from 44.6 million litres in August 2024 to 14.7 million litres in April 2025. This decrease coincides with an impressive 670% increase in local production. The increase in local supply is attributed to the phased restart of the Port Harcourt Refining Company and the gradual expansion of modular refineries.
Nevertheless, Ahmed warned that Nigeria still faces challenges in meeting its domestic consumption targets, with combined national supply crossing the government’s 50 million litre per day benchmark only twice in the past eight months.
Ahmed further explained that six private refineries and four public refineries currently produce a total of 1.12 million barrels per day. These include the Dangote Refinery, which alone accounts for 650,000 barrels per day.
The NMDPRA’s outlook for the future remains uncertain, with Farouk Ahmed urging stakeholders to prepare for prolonged instability in the oil sector, as global geopolitical and economic shifts continue to disrupt the market.