Oil
Donald Duke blames security costs for high Nigerian fuel prices
Former presidential candidate Donald Duke claims security expenses and dilapidated infrastructure outstrip actual crude extraction costs in Nigeria.
Key points
- Punch reported that Donald Duke pegs actual crude production costs between $12 and $15 per barrel.
- Duke stated that security and infrastructure inflate total expenses to between $25 and $45 per barrel.
- He suggested fuel dyeing and contract refining as potential measures to curb smuggling and lower domestic pump prices.
High security expenses and deteriorating infrastructure are driving up crude oil production costs in Nigeria, according to political figure Donald Duke. Speaking in an interview reported by Punch, the former Cross River State governor argued that these overheads exceed the actual cost of extracting petroleum.
Production and security costs
Duke noted that while extracting a barrel of crude costs between $12 and $15, additional burdens such as asset protection and poor infrastructure push the total expenditure much higher. According to his figures, these outlays elevate the overall expenses to between $25 and $45 per barrel.
He questioned the economic viability of paying up to $15 simply to secure a barrel that costs a similar amount to produce. He added that the Nigerian National Petroleum Company is attempting to bring production expenses down to $20 per barrel.
Proposed pricing and policy shifts
Addressing retail petroleum costs, Duke discussed previous proposals to lower petrol prices. While he initially suggested a target of ₦300 per litre, he acknowledged that this figure is no longer entirely tenable due to prior government forward-sale commitments.
However, he maintained that blending domestic crude supplies with local joint venture purchases could still reduce retail prices substantially below current levels. To combat cross-border smuggling, Duke suggested colouring domestic fuel rather than penalising citizens through high prices, enabling security agencies to trace illicit exports.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
85.9% of Nigeria’s merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
