…. Says Cost In Nigeria Is 50% Below Global Average
The Federal Government has defended the current price of petrol, attributing it to the economic reforms introduced by President Bola Ahmed Tinubu, and insisting that Nigeria still enjoys relatively cheaper fuel compared to global benchmarks.
Speaking during the commissioning of the Nigeria Revenue Service headquarters in Abuja, the agency’s Executive Chairman, Zacch Adedeji, said data shows petrol prices in Nigeria remain significantly lower than in many parts of the world.
According to him, petrol sells at about $0.88 per litre locally, compared to roughly $1.70 in the United States, while prices in countries such as India and South Africa are also higher. He argued that, on average, petrol in Nigeria is about 50 per cent cheaper globally, largely due to the administration’s decision to support local refining.
Adedeji acknowledged public dissatisfaction with rising pump prices but maintained that the figures reflect broader economic realities rather than policy failure.
Following his inauguration, Tinubu scrapped the long-standing fuel subsidy regime, a move that saw petrol prices jump from under N200 per litre to nearly N1,000. Prices have since climbed further, exceeding N1,200 in some areas, partly driven by global oil market volatility, including tensions linked to the Middle East crisis.
Despite this, Adedeji insisted that fuel supply has improved significantly. He credited the operational capacity of the Dangote Refinery for reducing reliance on imports and stabilising availability across the country.
He noted that without the subsidy removal and related reforms, Nigeria might have faced severe shortages, long queues, and even higher effective costs due to supply disruptions.
The NRS boss also praised the Federal Government’s “Naira-for-crude” policy, describing it as a bold shift that allows crude oil transactions in local currency. According to him, the initiative has helped reposition Nigeria from a net importer to a net exporter of refined petroleum products, with reports indicating exports of refined cargoes to other African markets.
Comparison With Current Economic Reality in Nigeria:
While the government’s position highlights macroeconomic and comparative gains, the lived reality for many Nigerians presents a more complex picture:
- Relative vs. Real Affordability
Although petrol may be cheaper in dollar terms compared to countries like the U.S. or South Africa, affordability in Nigeria is significantly lower. Average incomes are far below those countries, meaning Nigerians spend a larger share of their earnings on fuel. In practical terms, petrol feels more expensive locally despite being cheaper globally.
- Inflationary Pressures
The removal of fuel subsidy has triggered widespread inflation across transportation, food, and basic goods. Higher fuel costs have cascaded through the economy, worsening the cost of living crisis.
- Exchange Rate Impact
The depreciation of the naira has offset some of the benefits of local refining. Even if petrol is priced lower in dollar terms, the weakened currency makes it more expensive in naira, intensifying economic pressure on households and businesses.
- Supply Stability vs. Price Volatility
There is some improvement in fuel availability, with fewer queues compared to previous years. However, price volatility remains a concern, as pump prices still fluctuate based on global oil trends and exchange rate movements.
- Dangote Refinery Effect — Gradual, Not Immediate
The Dangote Refinery is expected to improve long-term energy security, but its full impact on reducing domestic prices is still evolving. Market forces, pricing structure, and distribution costs continue to influence final pump prices.
- Export Claims vs. Domestic Strain
While exports of refined products may signal progress, many Nigerians question the benefit if domestic consumers continue to face high fuel costs and economic hardship.
Bottom Line:
The government’s argument is largely based on global price comparisons and structural reforms, which show some positive shifts in supply and policy direction. However, the everyday economic reality—marked by high living costs, low purchasing power, and currency weakness—means many Nigerians do not yet feel the benefits of these reforms.
