Professor Omowumi Iledare
Nigeria’s energy sector is showing early signs of coordinated progress under the Tinubu administration, but translating these gains into sustainable value will require consistency, institutional discipline, and credible market reforms.
This position was expressed by Professor Omowumi Iledare, Petroleum Economics Professor Emeritus and former President of the International Association for Energy Economics (IAEE), in reaction to a recent Valuechain Magazine feature on Mrs. Olu Arowolo Verheijen, Special Adviser to President Tinubu on Energy.
A Promising Start, But the Journey Has Just Begun
According to Professor Iledare, the government deserves credit for better coordination and tangible movement in the gas sector.
“Unlocking the NLNG feedgas agreements after decades of delay is a positive signal,” he noted. “It lowers transaction risk, restores a measure of investor confidence, and aligns multiple agencies behind a common purpose.”
However, he cautioned that coordination must evolve into value creation, stressing that real transformation in petroleum economics depends on policy stability, enforceable contracts, and credible fiscal incentives that survive political cycles.
Gas-Led Growth: Progress with Fragile Foundations
The reported 8.6 percent increase in daily gas output and the reduction in gas flaring to 7.16 percent show that pragmatic actions are replacing rhetoric. Yet, Iledare urged verification.
“We must celebrate progress with humility,” he said. “Flaring reduction should be supported by metered data and collected penalties, not mere estimates. Real economics demands measurable proof.”
He emphasized that while NLNG feedgas deals strengthen export potential, domestic industrialization still faces headwinds.
“Gas for export clears in dollars, gas for domestic use clears in naira. Unless tariffs become cost-reflective and offtakers remain creditworthy, domestic gas will always struggle to compete with export markets.”
Institutions, Incentives, and the Integrity of Policy
Professor Iledare stressed that infrastructure alone cannot guarantee prosperity.
“Pipelines and processing plants mean little if contracts are weak, pricing is distorted, and FX convertibility is uncertain,” he warned.
“The petroleum value chain thrives only when the rules of engagement are predictable and enforced.”
He pointed to the ongoing implementation of the Petroleum Industry Act (PIA 2021) as the single most important determinant of investor confidence. Consistency, not convenience, must guide its execution.
Energy for People, Not Just Policy
Commending the government’s clean-cooking initiative and LPG penetration goals, the professor added that energy access must remain inclusive and self-sustaining.
“Every naira invested in the energy chain should multiply productivity, reduce imports, and improve lives,” he said. “That is how gas becomes a development tool, not just a commodity.”
The Bottom Line: From Headlines to History
While applauding Mrs. Verheijen’s coordinating role and data-driven approach, Professor Iledare emphasized that time consistency will determine the sector’s true success.
“Progress is visible, but the test of greatness is endurance. Nigeria must move from celebrated projects to self-financing systems—where prices, payments, and property rights align for value creation,” he concluded.
Omowunmi Iledare, PhD, FNAEE, Snr.FUSAEE, FEIN, is Professor Emeritus of Petroleum Economics, Louisiana State University, and Principal Facilitator, FUPRE Energy Business School. He is Executive Director of the Emmanuel Egbogah Foundation, Abuja, and a respected voice in global energy policy and economics.
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