An energy expert, Billy Gillis-Harry, has urged the federal government to invest any windfall from rising crude oil prices into the refineries and strategic sectors of the economy to ensure long-term national

benefits.

Mr Gillis-Harry, who is also the national president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), made the call in an interview with journalists on Sunday in Abuja.

Nigerians have expressed concern about the implications of the U.S./Israel-Iran war on crude oil prices in the global oil market and the expected boom for Nigeria, following the 2026 budget benchmark of 64.9 dollars per barrel.

“Nigeria stands to benefit from a significant fiscal windfall as oil prices rise well above the 2026 budget benchmark of 64.9 dollars per barrel,” he said.

Mr Gills-Harry said the budget also assumed production of 1.84 million barrels per day and an exchange rate of N1,400 per dollar.

This, he said, meant Nigeria could benefit significantly from the current surge in global crude oil prices, triggered by escalating tensions in the Middle East.

Mr Gillis-Harry recalled that a similar situation occurred during the Gulf War in the 90s when the country reportedly earned over $12 billion in oil windfall.

According to him, with Nigeria’s 2026 budget benchmark pegged at $64.9 per barrel, the current international crude oil price range of $92 to $100 presents a major revenue opportunity for the country.

He, however, cautioned that such windfalls must be properly managed to avoid repeating past mistakes associated with poor utilisation of excess oil earnings.

“The government should channel the additional revenue into productive investments that can generate long-term value for the country.

“We have a sovereign wealth fund that should be strengthened, our refineries that have remained largely comatose need to be revived, and the gas revolution being promoted by the government should also receive stronger funding,” he said.

Mr Gillis-Harry said that while saving excess revenue was important, investing the funds in viable economic ventures capable of generating additional income for the country would be more beneficial.

Speaking on the implications of U.S.-Israel tensions with Iran for global oil prices, he said that geopolitical conflicts in major oil-producing regions often disrupt global energy supply chains, pushing crude oil prices higher.

He explained that although Nigeria is an oil-producing country, it still felt the impact of international price fluctuations because crude oil is traded globally.

“Domestic refineries must purchase crude oil at international market prices.

“Crude oil is priced internationally, and anybody who wants to buy crude oil in Nigeria will buy it at the international price. That is why you see fluctuations even in local refining operations,” he said.

Mr Gillis-Harry cited the operations of the Dangote Refinery, explaining that the refinery purchased crude oil at the international dollar price, even though payment was made in naira at the prevailing exchange rate.

“Nigeria cannot simply allocate all its crude oil production to domestic refineries because a large portion of the production is tied to joint venture agreements with international oil companies such as Shell plc. and Chevron Corporation.

“These companies invest in the exploration and production process, so crude oil ownership and allocation are shared under existing partnership arrangements.

“So, the government should focus on expanding Nigeria’s crude oil production capacity to about four million barrels per day to meet both domestic refining needs and international obligations.

“Increasing production and encouraging investment in refining would enable Nigeria to become a major hub for petroleum product refining and export,” he stated.

According to him, exporting refined petroleum products would generate greater economic value for the country than exporting crude oil alone.

Mr Gillis-Harry also dismissed calls for subsidising crude oil supply to refiners, saying that the government does not have full control of crude production because of the joint venture structure of Nigeria’s oil industry.

He emphasised the need for authorities to strengthen oversight functions and ensure that the country’s oil assets were properly managed to maximise national revenue. 

(NAN)