Regan Brown
As of January 1, 2024, Nigerians are paying up to N690 per liter for petrol. This is a cause for concern for many Nigerians, who are worried about the impact of rising fuel prices on their already strained budgets. The price of petrol in Nigeria is determined by various factors, including the cost of crude oil on the international market and the exchange rate. Some Nigerians anticipate a potential decrease in petrol prices with the commencement of operations at the Dangote refinery and state-controlled refineries.
| Characteristics | Values |
|---|---|
| Price of petrol per litre as of January 1, 2024 | Up to N690 |
| Petrol price in some Nigerian states as of January 1, 2024 | Enugu: N660-N690; Federal Capital Territory (FCT), Abuja: N660-N665; Kano: N670-N680; Abia: N670; Uromi, Edo: N650-N680 |
| Anticipated price of petrol | N1,200 |
| Price of octane-95 gasoline as of July 28, 2025 | N816.67 |
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What You'll Learn
Petrol prices vary across states
As of January 1, 2024, Nigerians are paying up to N690 per liter for petrol. A review of petrol prices across some Nigerian states revealed a diverse pricing landscape. Petrol prices in Enugu state, for instance, fluctuate between N660 and N690 per liter. Prices in the Federal Capital Territory (FCT) of Abuja vary between N660 and N665 per liter, with TotalEnergies in Katampe offering a lower price of N642 per liter. Kano state experiences a range of N670 to N680 per liter, while Abia state has a consistent price of N670 per liter. Uromi, Edo state, sees prices ranging from N650 to N680 per liter.
These variations in petrol prices across Nigerian states can be attributed to several factors, including the cost of crude oil in the international market, exchange rates, and the impact of subsidies. The price of crude oil has increased from less than $80 per barrel to around $93-$94 per barrel, affecting the local petrol prices. Additionally, the Nigerian government has been subsidizing petrol prices, which has sparked concerns among citizens about the potential impact on their budgets.
The anticipation of a decrease in petrol prices is linked to the commencement of operations at the Dangote refinery and state-controlled refineries in Port Harcourt, Kaduna, and Warri. The elimination of import charges and fees paid in dollars is expected to provide some relief in pricing. However, the exact extent of the reduction remains uncertain until the refineries begin production.
As of July 2024, the price of octane-95 gasoline was 816.67 Nigerian Naira per liter, significantly lower than the global average of 1971.18 Nigerian Naira. The dynamic nature of the energy market and the influence of various factors contribute to the fluctuations in petrol prices across Nigerian states.
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The impact of international factors
Fuel prices in Nigeria have been volatile, with prices rising from below 200 naira per litre in 2023 to over 1,000 naira per litre in 2024. This volatility has been driven by a complex interplay of international factors, including:
Subsidy Removal
In October 2024, the Nigerian National Petroleum Company (NNPC) announced the removal of fuel subsidies, resulting in a more than 15% increase in petrol prices. This policy shift aimed to reduce the financial burden on the government, as subsidies had cost billions of dollars annually. However, the removal of subsidies has had a significant impact on Nigerian households and businesses, exacerbating the existing cost-of-living crisis.
Exchange Rate Fluctuations
The depreciation of the Nigerian naira against the US dollar has influenced fuel prices. As Nigeria imports a significant portion of its refined petroleum products, a weaker naira increases the cost of these imports, subsequently raising retail fuel prices.
Global Oil Market Dynamics
Fluctuations in global crude oil prices directly affect the cost of refined petroleum products. As an oil-producing country, Nigeria is susceptible to international market trends, and changes in crude oil prices often lead to corresponding adjustments in domestic fuel prices. For example, when crude oil prices increase from less than $80 to $93/94 per barrel, the price of petrol in Nigeria also needs to increase.
Local Refining Developments
The state of local refining capabilities also plays a role in fuel price fluctuations. Nigeria's limited refining capacity means that the country relies on imports of refined petroleum products, exposing it to global price fluctuations.
Market Deregulation
Market deregulation, or the lack of government intervention in the fuel market, can impact fuel prices by allowing them to be determined by market forces. While deregulation can promote competition and efficiency, it can also lead to price volatility and potential exploitation by private companies.
The interplay of these international factors has significantly influenced fuel prices in Nigeria, impacting its economy and citizens. Understanding these factors is crucial for policymakers to navigate the challenges posed by fuel price volatility and to make informed decisions that balance the country's economic needs with the welfare of its people.
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Government subsidies
Fuel subsidies in Nigeria have been a significant economic and political issue in recent years. The government has long subsidised petrol, keeping consumer prices below the international market rate and using government funds to pay the difference. This has resulted in a substantial cost to the state—estimated at USD 3.9 billion, almost double the health budget.
The Nigerian government has made several attempts to reform or end the fuel subsidy, with the most recent occurring in May 2023. President Bola Tinubu announced the removal of the subsidy in his inaugural address, citing the need to redirect funds towards public infrastructure, education, healthcare, and job creation. This decision led to a spike in petrol prices, with a gallon of petrol increasing from about ₦780 ($1) to ₦2160 ($2.80).
The end of the fuel subsidy has been a contentious issue in Nigeria, with organised labour groups threatening strikes and expressing concern about the impact on already strained budgets. Many Nigerians oppose the removal of subsidies, arguing that it will increase their cost of living. Additionally, there are allegations of corruption and incompetence against the government, with some believing that the government lacks the capacity to implement effective compensation programs or redirect savings towards infrastructure development.
Despite the opposition, the Tinubu administration successfully negotiated with labour unions to avoid a nationwide strike. The government's position is that the subsidy was no longer sustainable given the country's limited resources and that the savings from its removal would be reinvested in areas that would improve the lives of millions.
The removal of the fuel subsidy is expected to have several economic and environmental benefits. Experts argue that the subsidy encouraged excessive and inefficient energy consumption and contributed to growing budget deficits. Ending the subsidy is projected to reduce carbon dioxide (CO2) emissions by more than 15 million tonnes annually, helping Nigeria meet its commitments under the Paris Agreement. Additionally, the government can now invest the savings in critical areas such as infrastructure, education, and healthcare.
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Refinery production
The Dangote Refinery is located along the coast from Nigeria's commercial hub, Lagos, in the southern part of the country. It is a massive project, covering an area almost the size of 4,000 football pitches. The refinery was built by Africa's richest man, Aliko Dangote, who made his fortune in cement and sugar before taking on this endeavour. The total cost of the project is estimated to be around $19 billion.
At full production, the Dangote Refinery is expected to process approximately 650,000 barrels of crude oil per day, transported via pipelines from oil fields in the Niger Delta. This will result in the production of 50 million litres of Euro-V quality gasoline, 17 million litres of diesel, aviation fuel, and plastic products daily. The refinery's capacity far surpasses the total output of Nigeria's existing refining infrastructure, and it is designed not only to meet the country's entire domestic fuel demand but also to have a surplus for export.
The progress of the Dangote Refinery has been closely watched by Nigerians, as it is expected to have a significant impact on fuel prices in the country. In July 2024, it was announced that the refinery would attain a capacity of 500,000 barrels per day within two months, exceeding the country's daily usage of 480,000 barrels. This surplus production is intended for export, and it is hoped that the refinery will drive down the price of petrol in Nigeria.
The significance of the Dangote Refinery lies not only in its potential to reduce fuel prices but also in ending Nigeria's dependence on fuel imports. Nigeria, despite being Africa's largest producer of crude oil, has faced challenges in meeting its fuel demands due to the non-operational status of its government-owned refineries. The Dangote Refinery, with its substantial capacity and efficient infrastructure, is poised to address these issues and play a pivotal role in the nation's economy.
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The impact on Nigerians
Fuel prices in Nigeria have been on a fluctuating journey for decades, impacting Nigerians in various ways. In January 2024, marketers considered setting petrol prices at N1,200/litre, sparking concerns among Nigerians about their already strained budgets. This potential price hike comes after President Bola Tinubu scrapped a costly petrol subsidy in 2023, causing a surge in fuel prices from N195 to N617 per litre.
The impact of fuel price increases on Nigerians cannot be overstated. For many, the rising fuel costs directly affect their daily lives and livelihoods. Adeola Owoye, a bank staff member, expressed worry about how the potential hike would affect their transport costs, stating that their daily commute already consumes a significant portion of their salary. Chukwuemeka Nnaji, a taxi driver, shared similar concerns, highlighting the dependence of their livelihood on affordable fuel.
The historical context of fuel prices in Nigeria adds to the concerns of its citizens. Since 1973, fuel prices have risen from 6 kobo to a staggering N617 per litre in 2023. This includes notable increases during different presidential administrations, such as a 116.92% increase during Jonathan I's term in 2012, which triggered the Occupy Nigeria protests.
The removal and reinstatement of subsidies have also played a significant role in fuel price fluctuations, impacting transportation costs for both public and private commuting. The subsidy, originally intended to shield citizens from global oil market changes, has become a complex issue plagued with allegations of corruption and mismanagement.
As Nigeria transitions to selling crude oil to the Dangote Refinery and gasoline is sold at market rates, the future of fuel prices and their impact on Nigerians remains uncertain. However, with the removal of subsidies, the government aims to relieve the treasury of heavy costs, which were projected to be at least $3.7 billion in 2024.
Nigerians continue to feel the strain of rising fuel prices, and it remains to be seen how the government will navigate the complex interplay between fuel prices, subsidies, and the economic welfare of its citizens.
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Frequently asked questions
Nigerians are paying up to N690 per liter for petrol as of January 1, 2024.
The cost of crude oil on the international market and the exchange rate influence the price of fuel in Nigeria. The country's government also subsidizes fuel prices.
The price of octane-95 gasoline in Nigeria is 816.67 Nigerian Naira per liter as of July 28, 2025.
