Tag: Energy security

• By Awaal Gata

There are moments in a nation’s history when a single bold decision rewires the entire system and restores sanity to an industry long ruled by chaos. For Nigeria, that moment arrived in May 2023, when President Bola Ahmed Tinubu made the daring choice to remove the petrol subsidy. That decision, painful as it was for many, did not just free up fiscal resources. It catalysed the most transformative era in Nigeria’s energy sector since independence.

But while the headlines focused on the end of fuel queues and rising pump prices, a quieter revolution was unfolding, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) at the centre of it. The authority has become one of the most effective regulatory institutions in post-PIA Nigeria. Together, the president’s political will and Farouk Ahmed’s technocratic clarity have redefined what energy security means for Nigeria.

When the Petroleum Industry Act (PIA) was signed into law in 2021, it was widely celebrated as a legislative landmark. But laws are only as powerful as the hands that enforce them. The PIA merged three erstwhile regulatory bodies—the Department of Petroleum Resources’ downstream division, the Petroleum Equalisation Fund, and the Petroleum Products Pricing Regulatory Agency—into a single streamlined agency: the NMDPRA. It was a necessary consolidation to untangle decades of bureaucratic overlap, but its success hinged on leadership. This paved the way for the emergence of Engr. Farouk Ahmed.

Armed with over three decades of industry experience, Farouk didn’t just inherit a new regulatory agency; he repositioned one. From licensing to market surveillance, every touchpoint has been automated. This is not the old petroleum regulatory playbook of backroom deals and selective approvals. This is the rule of law, encoded in software and policy.

Yet perhaps the authority’s most significant achievement has been restoring credibility to Nigeria’s energy market. Under the subsidy regime, energy security was a myth—a politically convenient mirage. Products were hoarded, smuggled, or subsidised into oblivion. Refineries were inactive. Marketers were cartelised. And the average Nigerian bore the brunt of an inefficient and manipulated system.

President Tinubu’s removal of the subsidy did more than unshackle the budget. It provided NMDPRA with the space to do what institutions dream of: reform without interference. And to the president’s enduring credit, he gave Farouk Ahmed the autonomy—and the political cover—to act without fear or favour. That autonomy is paying off.

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Since deregulation, Nigeria’s downstream sector has blossomed into a competitive, liberalised marketplace. The number of marketers sourcing and distributing petroleum products has risen, and monopolies once entrenched by opaque practices are being dismantled. New refineries—from the 650,000 BPSD Dangote facility to smaller modular plants—are coming online, with the NMDPRA ensuring rapid licensing and compliance oversight.

But perhaps most crucial is how this revolution touches the lifeblood of every industrial society: energy security. Energy security isn’t a buzzword; it’s the foundation on which nations rise or fall. No economy can function—let alone industrialise—without reliable access to petroleum products, gas, and electricity. The NMDPRA understands this. That’s why it developed the National Strategic Stock framework, a forward-looking buffer to prevent future supply disruptions. It’s why the authority has invested heavily in gas infrastructure, issuing distribution licences, boosting CNG conversion centres, and commissioning processing plants that collectively add over three billion standard cubic feet of gas per day.

For Nigeria, gas is no longer the fuel of the future—it is the fuel of the present. Through initiatives like the Decade of Gas, PiCNG, and the Midstream and Downstream Infrastructure Fund (MDGIF), the NMDPRA is driving Nigeria’s transition to a gas-powered economy. Whether for vehicles, industries, or households, natural gas now represents Nigeria’s best shot at clean, affordable, and abundant energy.

And while the old cartel may have hoped to frustrate this shift—launching lawsuits, sponsoring malign media attacks, and pulling familiar strings—the authority has remained undeterred. Engr. Farouk Ahmed, with the full support of President Tinubu, has stood his ground. Regulatory frameworks are now enforced without bias. Market pricing is transparent. And no company, no matter how powerful, can hold the nation to ransom.

This is what happens when visionary reform meets fearless execution. When a president refuses to be held hostage by vested interests, and a regulator is protected from interference. Nigeria’s energy sector is not only stable—it is now investable. And the benefits are already rippling across the economy, from jobs in refining and pipeline construction to lower emissions from CNG vehicles.

Of course, challenges remain. Energy poverty is still widespread. Infrastructure deficits linger. And the global transition to renewables looms large. But for the first time in decades, Nigeria has built a credible foundation for progress. That foundation is anchored in energy security, regulatory certainty, and the courage to do what is hard.

It is tempting to measure leadership in speeches and slogans. But true reform is quiet. It happens in boardrooms, in data centres, in policy drafts, and enforcement notices. It happens when a president backs his technocrats. And when technocrats, in turn, rise to the moment.

With NMDPRA, Nigeria has found that rare thing: a regulator that regulates. The result? A sector once defined by dysfunction is now humming with activity. That, more than anything else, is how nations rise. One policy, one agency, one free hand at a time.

 •Gata is a media practitioner and public affairs analyst, and writes from Abuja.

Conventional wisdom dictates that insecurity rises with unemployment and poverty because unemployment leads to loss of income which affects the people’s ability to pay their bills and provide basic necessities for their house-holds and dependent relatives. It is because of the insecurity posed by unemployment that advanced countries make social security payments to the unemployed to keep them off the streets until they get jobs. This has helped to make their nations safer than countries like Nigeria where no forms of assistance are given to the unemployed.

The massive increase in oil revenue as an aftermath of the Middle-East war of 1973 created unprecedented, unexpected and unplanned wealth for Nigeria. The national currency, Naira, strengthened as foreign exchange inflows outweighed outflows, and foreign reserves were built up. Up until 1985, the Naira was stronger than the US Dollar. This encouraged import-oriented consumption habit that soon turned Nigeria into a perennial net importer, which became a major problem when oil earnings decreased with lower international oil prices. External reserves collapsed, fiscal deficits mounted and external borrowing ensued with the “jumbo loans” taken in 1979. Most of Nigeria’s macro-economic indices became unstable and worrisome.                         

Several policy initiatives to address the defective structure and inefficiencies were taken, but poorly implemented and sometimes contradictory (with cases of self-interest motivated reversals). These created new distortions and further weakened the inchoate institutions for policy implementation. The average Nigerian therefore, became so sensitive to petroleum oil and all the variables surrounding it, to the extent that any development in the international oil markets invites an almost instantaneous reaction from domestic economic agents and policy makers alike.

On September 15, the NNPCL received the first batch of products from Dangote refinery. The NNPCL, saying it bought per litre at N898, put the pump price at between N950 in Lagos; N992 in Abuja and N1,019 in Maiduguri, which is the farthest distance to the Lagos supply point. The price announcement sparked outrage among Nigerians, who eagerly expected a lower pump price from the Dangote Refinery. The expectation in many quarters is that Dangote Refinery will be an elixir for the fuel subsidy issues. We must bear in mind, that, Dangote and NNPCL are corporations and must make profit.

The chief aim of a corporation is to produce profit; while the chief aim of a republic (government) is to protect the liberty, dignity and security of the citizens. We live in unpredictable, ever-changing and variable world. So, we must understand the times we live in and the prevailing circumstances. And our strategy for nation building should be in harmony with the time and prevailing circumstances.

At this time in world affairs, the prevailing circumstance is globalization. Globalization reduces the autonomy of national governments over spending decisions. International trade puts pressure on governments to cut spending, especially with respect to social welfare spending in developing countries. International groups have increasingly called for ending subsidies on fossil fuel—for economic and environmental reasons—and energy policymakers inside Nigeria have aired similar views. They argue that, with the removal of fuel subsidy, the government can free up resources that would have been spent on the subsidy to invest in other critical sectors such as education, healthcare, security and infrastructure.

While the advanced nations preach deregulation, decontrol, free trade and the elimination of subsidies to poor nations like Nigeria, they themselves control their foreign trade, and maintain welfare schemes and various subsidies. In the U.S.A, there are numerous government programs that together make up the social welfare system. Large oil companies in the United States receive subsidies in the form of tax credits and exemptions. This is the two-facedness endemic in international affairs; what is good for the goose might not necessarily be good for the gander.

Nigerians should come to terms with the removal of fuel subsidy, as government provides palliatives including sell of subsidized rice to civil servants. The real safety net could be provided by channeling the saved subsidy funds to improving the electricity supply in the country. With steady power supply, citizens will be saved the cost of running petrol/diesel generators. 

The major constraint in continuing businesses, maintaining standards of living, and increasing economic development in Nigeria is the lack of constant electricity supply which can be linked to underutilization and under-exploration of our natural resources. Without energy security, most economic activities cannot be carried out and no country in this 21st century has substantially reduced poverty without massively making use of energy. So, energy security is a catalyst for economic growth and poverty alleviation.

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Nigeria has the world’s ninth largest gas reserves and yet badly lags behind peer-countries. Much of the gas ought to have been converted to electricity for the teeming population. The benefits of gas as a commodity have not been fully explored in Nigeria. The power sector, though fraught with its own issues has been starved of sufficient gas for power production which if adequately harnessed will close the energy access gap between supply and demand in the country, currently being managed by the use of private diesel or petrol generators with negative health consequences.

Nigeria has a total installed power generation capacity of 16,384MW. Power generation in Nigeria is mainly from hydro and gas-fired thermal power plants, with the hydro plants providing 2,062MW and the gas-fired 11,972MW. However, Nigeria is generating under 5,500 MW of electricity regularly from all available generating plants. At present, electricity demand in the country is about 30,000MW. So, we need about 15,000MW more (assuming we are generating about 15,000MW from the existing capacity of 16,384MW), to meet the demand. Using the same combined cycle gas plants, we could get there within the next two years, and it will cost about $15Billion (Fifteen Billion Dollars) at $1,000/KW. Note, combined cycle gas plant consists of a simple cycle gas plant, combined with another external combustion engine, operating on the Rankine cycle—hence its name “combined cycle”. 

Nigeria faces several challenges in its energy sector, but there are also numerous opportunities for growth and development. Despite the challenges faced by energy sector in Nigeria, there are opportunities for entrepreneurship and economic growth in the sector. The opportunities could be harnessed through public-private partnership to enhance energy security in the country.