Nigeria’s economy is something of an enigma. Its fundamentals defy all economic logic. Nigeria exports what it lacks and imports what it has in abundance.
As the largest exporter of crude oil in Africa,
Nigeria strangely imported crude oil worth $1.6 billion in the first quarter of 2026.
The import of crude oil takes a mysterious stance as the largest exporter of the commodity went as low as importing crude oil from tiny Togo which is not known for oil production.
Togo imports crude oil from Nigeria and Nigeria strangely imports it back from the tiny West African country. The strange thing about the indefensible crude oil round-tripping is that it is one of the intrigues designed to frustrate Dangote Refinery out of business to enable European refineries regain the Nigerian market.
The concerted efforts to frustrate the refinery have failed. So, Dangote Refinery is the one importing crude oil from different parts of the world just to keep its production lines humming.
Dangote Refinery has raised its operating capacity to 700, 000 barrels per day. The refinery is forced to import Nigerian crude oil from foreigners who imported from Nigeria.
The refinery buys Nigerian crude oil at a premium of $18 per barrel and ships it back home at extra cost. The only thing that the treacherous men targeting Dangote Refinery have succeeded in doing is that they have made its refined petroleum products more expensive than imported ones.
The petrol from Dangote Refinery is N153 per litre more expensive than imported petrol.
The World Bank was upset by the development and it wrongly blamed Dangote Refinery for maintaining a monopoly that makes petrol too expensive for Nigerian consumers.
The bank pressured the federal government to allow competition by issuing licenses for the importation of petrol to break Dangote monopoly and bring down price.
The federal government yielded and resumed petrol importation with its lean foreign exchange reserves even as Dangote can supply everything.
Nigeria now imports petrol which Dangote Refinery exports to different parts of the world including distant South Korea.
Nigeria equally imports crude oil that it has in abundance. That is simply because it does not want to sell it to the refinery that made Nigeria a refined products exporter.
Those who live on imported petrol want the deal to continue even when it empties Nigeria’s foreign reserve.
It is perhaps in the current cooking gas crisis that one sees an economy that is managed in a way that beats all economic sense.
Nigeria is blessed with what probably is the largest reserve of gas in Africa. Nigeria’s proven gas reserve stands menacingly at well over 200 trillion standard cubic feet.
Yet there have been an acute scarcity of cooking gas in the last three months.
Last week, a kilogramme of cooking gas sold in some retail outlets at N2, 550, up from N1, 200 some months ago. The irony of the cooking gas scarcity is that Nigeria’s crude oil producers flared 77 billion standard cubic feet of associated gas in the oil fields during the first quarter of 2026.
The federal government has made several failed attempts at ending gas flaring. Gas flaring pollutes the environment, depletes the ozone layer and worsens climate change.
The oil companies have defied several gas flaring deadlines, and nothing has happened. They would rather pay fine and flare the associated gas than build facilities for processing the gas for consumption.
Unfortunately, the laws forbidding gas flaring are hardly enforced by the regulator of the oil industry. Right now the excuse for the scarcity and surging price of cooking gas is that marketers are hoarding the product.
Another constraint is that Nigerian oil fields are scattered in different directions with some of the fields yielding too little gas to justify investment in gathering it for onward hauling to processing facilities.
Ironically, oil companies operating in Nigeria have drilling fields in developed countries like the United States of America (USA) and the United Kingdom. They do not flare gas in those developed economies because the laws there are strictly enforced.
They have repeatedly defied federal government’s deadlines for the ending of gas flaring because it is cheaper for them to pay fines that are hardly collected than invest in gas processing facilities. Nigeria may have to learn from the developed economies how to compel the oil companies to obey its laws.
There is no reason why there should be scarcity of cooking gas in Nigeria when 800 times the value of what is consumed is being flared in a process that pollutes the environment and worsens ozone layer depletion.
Since the Nigerian National Petroleum Company Limited (NNPCL), the regulator of the oil industry, is incapable of even collecting the token fines for gas flaring, the federal government should compel the oil companies to build gas processing plants. The cost of gathering the gas and hauling it to the processing plant is very expensive. Government should intervene.
The federal government can fund the establishment of gas pipelines to the processing plants while the oil companies bear the cost of building the processing plants by themselves.
The gas being wasted through senseless flaring is needed for various uses. The cement industry needs it to process cement and avoid the high cost of diesel and other sources of energy. Gas is needed for conversion of vehicles using diesel or petrol into thermal powered ones.
The power generation companies need gas to power their plants.
The scarcity of gas has repeatedly been blamed for the constant collapse of the national grid. In January 2026 the grid collapsed three times and plunged the whole country into darkness for several hours.
The federal government toiled for years to raise the country’s embarrassingly low cooking gas consumption to 2.2 million tonnes per annum when tiny Senegal consumes 9 million tonnes.
The current high cost of gas has forced several households back to the use of firewood and the consequent danger of deforestation. Gas at affordable price can reverse that.