Falana Urges Tinubu Government to End Petrol Imports, Adopt Local Production Based Pricing to Cut Fuel Costs.

Falana Urges Tinubu Government to End Petrol Imports, Adopt Local Production Based Pricing to Cut Fuel Costs.

Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has called on the Federal Government to end petrol importation and introduce a domestic production cost-based pricing system, arguing that Nigeria should not continue to expose consumers to the high costs associated with imported petroleum products despite its growing local refining capacity.

Falana made the call amid continuing concerns over rising petrol prices and the impact of fuel costs on transportation, food prices, businesses and household incomes across the country.

In a statement reported on October 12, 2026, the legal practitioner criticized the continued use of the Import Parity Price (IPP) model, which calculates domestic fuel prices by reference to the cost of importing petroleum products, including international market prices and associated logistics expenses.

He argued that the approach fails to adequately reflect Nigeria’s capacity to produce and refine crude oil domestically and called for a pricing framework based on the actual costs of crude oil production, refining, transportation and distribution within the country.

Falana Questions Government’s Petrol Price Intervention

Falana also expressed reservations about the Federal Government’s recent measures to cushion the effects of rising petrol prices, including a 30-day intervention involving a petrol discount at Nigerian National Petroleum Company Limited (NNPC) retail outlets and a proposed price modulation mechanism.

The government has announced a temporary reduction of ₦66 per litre at participating NNPC retail outlets, while a proposed price ceiling of ₦1,350 per litre is intended to moderate wholesale petrol costs.

However, Falana questioned whether these measures would provide meaningful and lasting relief to Nigerians without a fundamental review of the country’s fuel pricing structure.

He maintained that the government should prioritize a pricing system that reflects domestic production realities rather than relying on international import benchmarks to determine the cost of petrol sold within Nigeria.

The debate comes as households and businesses continue to grapple with the wider economic consequences of high energy and transportation costs.

Production Cost Pricing Could Lower Petrol Prices

Falana’s position draws on arguments advanced by petroleum engineer and economist Professor Izielen Agbon, who has advocated replacing import parity pricing with a Production Cost Pricing (PCP) model.

According to News reports, proponents of the alternative model estimate that petrol could sell for between ₦435 and ₦687 per litre, depending on domestic production costs and prevailing exchange-rate conditions.

The estimates remain projections associated with the proposed pricing framework rather than guaranteed pump prices. Actual retail prices would depend on several factors, including crude oil supply costs, refinery operating expenses, distribution charges, taxes, exchange rates and market conditions.

Nevertheless, supporters of production-cost pricing argue that a system reflecting domestic production economics could help Nigeria make better use of its petroleum resources and reduce consumers’ exposure to international supply disruptions.

The proposal also raises broader questions about how the government can balance affordable energy, competition among suppliers, investment in refining and the financial sustainability of the petroleum sector.

Nigeria’s Refining Capacity and Continued Dependence on Imports

Nigeria’s continued importation of refined petroleum products has remained a major point of contention, particularly as domestic refining capacity expands.

The Dangote Petroleum Refinery, alongside other local refining operations, has increased the country’s potential to meet a greater share of domestic fuel demand through local production.

However, the availability of domestic refining capacity does not automatically guarantee lower petrol prices. Refinery operating costs, crude oil availability, financing, foreign exchange exposure, transportation expenses and competition among suppliers all influence the final price paid by consumers.

In September 2026, Premium Times reported that Falana had urged the Federal Government to ensure that crude oil allocated for domestic consumption was supplied to local refineries, arguing that this would reduce dependence on imported petroleum products and potentially ease the pressure on fuel prices.

The question of crude oil supply has also featured prominently in discussions surrounding Nigeria’s naira for crude policy and the ability of domestic refineries to obtain sufficient feedstock under commercially sustainable conditions.

For Falana and other advocates of domestic production, ending unnecessary petrol imports must go hand in hand with ensuring adequate crude oil supply, strengthening local refining and establishing a pricing structure that reflects the country’s production costs.

Balancing Consumer Relief With Market Sustainability

The proposal to introduce production cost pricing comes amid a wider debate over Nigeria’s petroleum market reforms following the removal of the petrol subsidy in 2023.

The government has defended market-oriented reforms as necessary to reduce the fiscal burden associated with fuel subsidies and improve the allocation of public resources. However, the resulting increases in fuel costs have placed significant pressure on households, transport operators and businesses.

While Falana’s proposal seeks to address affordability, implementing such a system would require transparent accounting of production and refining costs, reliable crude oil supply, effective regulatory oversight and safeguards against anti competitive practices.

It would also require policymakers to determine how domestic prices should respond to changes in international crude oil prices and exchange rates, particularly where local refineries rely on imported inputs or incur costs linked to foreign currencies.

A sustainable solution would therefore need to address both the cost of producing petrol locally and the competitive conditions under which refiners and marketers supply the domestic market.

For Nigeria, the challenge is not simply to end petrol imports but to build a petroleum industry capable of supplying consumers reliably, competitively and at prices that reflect genuine economic costs.

Falana’s latest intervention has renewed calls for the Federal Government to reassess its fuel pricing policy and ensure that the country’s petroleum resources and expanding refining capacity translate into tangible economic benefits for Nigerians.

Whether production cost pricing can deliver the projected reductions will ultimately depend on the policy framework adopted, the availability of domestic crude oil, the efficiency of local refineries and the transparency of pricing across the petroleum supply chain.