Oil
Donald Duke urges lower security costs to cut Nigerian petrol prices
Former presidential candidate Donald Duke argues that high security and infrastructure expenses inflate Nigeria's crude oil production costs above extraction levels.
Key points
- Crude extraction costs between $12 and $15 per barrel, according to Donald Duke.
- Security and infrastructure expenses push total production costs significantly higher.
- Duke proposed contract refining and local crude sourcing to lower domestic petrol prices.
Nigeria allocates more resources to securing its crude oil than to the actual extraction process, according to statements by political figure Donald Duke reported by Punch Newspapers.
Production and security costs
Duke explained in a media interview that while baseline extraction costs range from $12 to $15 per barrel, deteriorating infrastructure and security burdens drive expenses up to between $25 and $45 per barrel. He noted that oil-producing companies factor these elevated security outlays into overall pricing.
Fuel exports constitute 85.9 per cent of Nigeria's merchandise exports, according to 2025 World Bank data, underscoring the critical role of petroleum economics in the national economy.
Pricing and policy alternatives
Addressing domestic fuel costs, Duke suggested that utilizing local crude supplies and engaging in contract-refining arrangements could reduce pump prices. Although an initial target of ₦300 per litre is no longer feasible due to government forward-sale commitments, he argued that blended pricing around ₦700 per litre remains achievable.
To curb cross-border smuggling without restricting domestic supply, Duke also recommended dyeing petroleum products a distinct colour, such as black, to enable security agencies to track illicit movement across borders.
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.
