The federal government has sought technical support from the International Monetary Fund (IMF) to develop a transparent fuel price modulation mechanism aimed at mitigating domestic price shocks and reducing vulnerability to global market volatility.
The permanent secretary of the ministry of petroleum resources, Vitalis Obi, made the request in Abuja during a joint meeting involving the Ministry, its regulatory agencies the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the IMF Fiscal Affairs Department (FAD) Technical Assistance Mission on Climate Policy.
Obi explained that the federal government is seeking ongoing technical support from the IMF’s fiscal affairs department to design a resilient and transparent price modulation framework.
He noted that such a mechanism would help cushion domestic price shocks, protect local markets from extreme global fluctuations, and maintain fiscal discipline.
Obi described the IMF mission as both timely and strategic, aligning with the government’s ongoing efforts to strengthen Nigeria’s fiscal framework amid global energy market uncertainties, post-pandemic recovery, and growing climate-related fiscal pressures.
He emphasized that the government’s bold and decisive removal of the general fuel subsidy was a necessary step toward restoring fiscal stability, redirecting public expenditure to critical infrastructure and social welfare, and ensuring the long-term sustainability of the energy sector.
He further noted that Nigeria remains steadfast in her commitment to reducing methane emissions and ending routine gas flaring, noting that through initiatives like the Nigeria Gas Flare Commercialisation Programme (NGFCP) and emerging carbon credit frameworks, the country is incentivising gas utilization across power generation, fertilizer production, and Compressed Natural Gas (CNG) markets.
These measures, he said, “Directly support Nigeria’s Nationally Determined Contributions (NDCs) under the Paris Agreement and align the petroleum sector with global environmental, social, and governance best practices.”
He called for continued IMF partnership, both technical and financial to enhance Nigeria’s fiscal analytics, climate policy modelling, and carbon pricing readiness.
The leader of the IMF technical team, Diego Mesa, commended the permanent secretary for providing an insightful overview of Nigeria’s current energy and fiscal landscape.
He stated that the mission’s presence in Nigeria, at the invitation of the federal ministry of finance, was part of ongoing engagements on fiscal reforms, sustainable development, and climate policy.
He noted that their focus within the ministry of petroleum resources would include fossil fuel and carbon taxation frameworks.
During the technical session, the director of planning, NUPRC, Abdul-Afeez Balogun, highlighted that the commission, established under the Petroleum Industry Act (PIA) 2021, is mandated to provide technical and commercial regulatory oversight of the upstream sector.
He said the commission is prioritizing the elimination of gas flaring, curbing of venting, and reduction of fugitive methane emissions as part of its sustainable regulatory mandate.
Also speaking, the director of planning, NMDPRA, Ayodeji O. O., explained that the Authority is responsible for regulating pipelines, gas processing, distribution, pricing, and consumer protection.
He noted that the Authority is currently refining tariff methodologies for pipeline storage and gas processing facilities to ensure fair returns on investment while protecting consumer interests.
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