In a recent interview, energy economist Prof. Wumi Iledare explained that the recent surge in petrol prices in Nigeria, which now range between N1,370 and N1,400 per litre, is primarily driven by internal economic factors rather than global crude oil price trends.
Prof. Iledare, a Professor Emeritus of Petroleum Economics and Policy Research at Louisiana State University, U.S., shared his insights with oir correspondence on Wednesday in Lagos. He pinpointed exchange rate instability as the most significant force behind the rise in petrol prices.
“The system in Nigeria is still largely dollar-dependent,” he remarked. Despite the operational presence of the Dangote Refinery, Nigeria remains reliant on imports for a significant portion of its fuel supply. This dependency results in petrol prices being aligned with international benchmarks, rather than being purely influenced by local production factors.
The professor also highlighted the consequences of policy inconsistencies, particularly the swift removal of fuel subsidies, which has outpaced the establishment of a competitive and efficient downstream oil market. As a result, Nigerians are now exposed to ongoing price volatility fueled by foreign exchange instability, inefficient supply chains, and limited refining competition.
Furthermore, the transition of the Nigerian National Petroleum Corporation (NNPC) Ltd. from a government-owned entity to a more commercially-driven oil company has added complexity to an already volatile pricing environment.
Prof. Iledare emphasized that the rising fuel costs are not without widespread economic consequences. “Higher petrol prices lead to increased transportation and production costs, which in turn exacerbates inflation, reduces household purchasing power, and hampers industrial output,” he noted. In a country where petrol is central to transportation, electricity generation, and supply chains, the impact of rising prices ripples across all sectors of the economy.
The professor warned against the reinstatement of blanket fuel subsidies, deeming them unsustainable and inefficient. Instead, he proposed a targeted approach to stabilize the exchange rate, expand domestic refining capabilities, improve market competition, and enhance infrastructure. He also recommended providing targeted support to vulnerable households instead of broad subsidies.
According to our correspondence ,many petrol stations in Lagos that previously sold fuel between N1,205 and N1,215 per litre have now raised their prices. NNPC Ltd. stations in areas such as Fadeyi, Ikorodu, and Palmgrove are now selling petrol for about N1,324 per litre. Leading marketers, including MRS, Northwest, BOVAS, AP (Ardova), and Mobil, have increased prices to between N1,334 and N1,350 per litre. Independent marketers such as Fagbems, Fanfar, Musarok, and Ranoil are charging higher rates, ranging from N1,350 to N1,424 per litre.
