Premium Motor Spirit (petrol) prices rose from N175 to N1,300 between May 2023 and May 2026, a 643 percent rise in three years.
According to the findings, the increase in petrol prices was caused by President Bola Tinubu’s suspension of subsidies shortly after his inauguration on May 29, 2023.
Furthermore, the devaluation of the naira exacerbated the situation, pushing the then-imported goods out of reach for many Nigerians.
Three years later, the cost of a liter of petrol at filling stations increased to between N1,300 and N1,400, depending on the region.
The recent price increase from around N800 to N1,300 was caused by Middle East tensions, which resulted in global oil disruptions due to the closure of the Strait of Hormuz.
Remember that right after Tinubu took the oath of office, he proclaimed that “the fuel subsidy is gone.”
This resulted in an instant increase in petrol prices, from N175 or N200 to more than N500 per liter. The Nigerian National Petroleum Company Limited, the main fuel importer, spearheaded the charge by hiking pump prices.
Surprisingly, Tinubu raised the fuel price without referring to the pledge he made in Abeokuta during his campaign to lower the price of gasoline.
With the withdrawal of fuel subsidies, prices rose, resulting in an increase in inflation across the country. The president, however, persuaded Nigerians that no gain comes without hardship.
Also, remember that when the government floated the currency rate in June 2023, the price of gasoline soared above N1,000.
However, the NNPC swiftly established what the International Monetary Fund described as an “implicit subsidy” payment through the back door. While the landing cost of petrol was roughly N1,200, the NNPC sold it at half the price based on the federal government’s guarantee to repay the deficit, or “under-recovery.”
For nearly a year, the NNPC sold the product at around N600 per liter, denying that it provided subsidies. However, in 2024, the state oil company admitted to selling below the cost price.
Former NNPC Chief Financial Officer Umar Ajiya claimed, “In the last eight to nine years, we have been importing PMS, which has been landing at a specific cost price, and the government has told us to sell it at half price.” The gap between the landing price and half price is a deficiency.
Following the admittance, petrol prices reached as high as ₦1,080. This coincided with the launch of the Dangote Petroleum Refinery’s PMS.
When the Dangote refinery began lowering gasoline prices around the end of 2024, it set up a price war in the petroleum industry.
With the Dangote refinery in the sector, petrol was selling for N800 to N900 until the US-Iran crisis occurred on February 28, 2026. Since the start of the US-Iran war, the Dangote refinery has frequently upped the gantry price of petrol, while filling outlets charge customers N1,300 or more.
The current spike in petrol prices has produced another increase in inflation, resulting in greater transportation expenses and rising prices for other commodities.
Efforts were made by the federal government to reduce transportation costs. The government introduced the Presidential Initiative on Compressed Natural Gas to hasten the adoption of CNG as an alternative to petrol and diesel.
Nonetheless, it was noticed that CNG adoption has yet to have a significant impact on the cost of living. Since petrol prices recently increased from N800 to N1,300, the federal government has been urged to implement measures to mitigate the impact on the public.
Energy economists advocated for targeted cash transfers to reduce the impact of rising fuel prices on vulnerable Nigerians.
Prof. Adeola Adenikinju, a past president of the Association of Energy Economists, described the current scenario as a “two-edged sword” for Nigeria, with possible financial benefits from increased oil prices on the one hand and worsening economic suffering for residents on the other.
According to him, rising gasoline prices have resulted in higher transportation fees and inflation, putting further strain on low-income households.
“This is the time that Nigeria should say, ‘Look, we are sending some cash to those poor people who are vulnerable,'” he added, emphasizing the importance of direct intervention to help the most vulnerable.
Adenikinju stated that while recent initiatives to boost civil worker allowances may bring some relief, they will exclude a substantial segment of Nigerians working in the private and informal sectors.
As a result, he asked the federal and state governments to work together to develop more comprehensive assistance structures.
Billy Gillis-Harry, national president of the Petroleum Products Retail Outlet Owners Association of Nigeria, expressed regret that the federal government was not taking actions to help the public despite reaping additional benefits from rising oil prices.
He said, “The government is not making any statements about the rising petrol prices, so it’s worrisome. At least, the government could come up with some measures. We are making some gains now on the price of crude oil. The government can give some back to reduce the cost of transportation so that food will not be expensive, along with a few other things. That’s what we have advised.”
The PETROAN boss noted that the price of petrol could rise above N1,500 per liter if the Middle East crisis is not de-escalated.
