The planned price cap on petroleum products by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could trigger investor flight from Nigeria’s downstream oil sector, with the attendant risk of weakening competition and pushing up petroleum prices, the immediate past President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has warned.

Osifo, who is also President of the Trade Union Congress of Nigeria (TUC), said price capping could send a negative signal to investors at a time when Nigeria urgently needs fresh capital to expand refining capacity and deepen competition in the petroleum market.
He said this in Lagos, during a reception in his honour, put together by members of his organisation, TotalEnergies E&P branch of PENGASSAN, following a successful leadership tenure, where he held sway as President of PENGASSAN for six years.

He urged NMDPRA to focus instead on attracting more investors to build modular and large-scale refineries, arguing that a competitive market would provide a more sustainable route to lower petroleum prices.
According to him, “If we focus on that price capping, we are going to drive away investors.”
He said the Petroleum Industry Act (PIA) had provided for a liberalised petroleum industry, stressing that the priority should be to bring more players into the market because competition would naturally put downward pressure on prices.

“What we should focus on is to have competition. When we have competition, competition naturally brings down price,” he said.
Osifo said attracting more refinery investors would increase domestic refining capacity and enable Nigerians to benefit from prices that better reflect local petroleum market conditions.
The immediate past PENGASSAN chief also called for increased investment in crude oil production, saying Nigeria should raise output from about 1.8 million barrels per day to between three and four million barrels per day within the next three to 10 years.

He said this was necessary given Nigeria’s substantial crude reserves, estimated at between 30 billion and 38 billion barrels, stressing that increased production would strengthen the industry and generate greater economic benefits.
On his legacy as PENGASSAN President, Osifo said his administration prioritised the protection of workers’ jobs and improvement of remuneration despite COVID-19, devaluation and major investment and restructuring in the oil and gas industry.

He disclosed that some PENGASSAN branches that had gone more than 10 or 15 years without collective bargaining agreements (CBAs) secured new agreements under his tenure, while branches whose agreements had remained unchanged for six to eight years also obtained improved welfare packages.
Osifo said salaries in some international oil companies had risen by 300, 500 and even 700 per cent within the last year, while union interventions helped protect workers from job losses following acquisitions and restructuring in the industry.

He said improved remuneration and job security had a wider economic impact because oil and gas workers support millions of dependants and communities.
Osifo also highlighted the PENGASSAN Foundation’s interventions in education, healthcare, electricity and community development as part of his leadership legacy.
He said his immediate priority after leaving PENGASSAN remained his tenure as TUC President, where he has about two and a half years left, adding that his focus was to take the labour centre to greater heights.