The affordability of petrol has become a contentious issue in Nigeria, sparking widespread complaints. However, a recent report by globalpetrolprices.com reveals a surprising reality: Nigeria boasts the cheapest petrol prices in West Africa and ranks 13th globally in terms of affordability. Contrary to popular perception, the price of a litre of petrol in Nigeria remains significantly below $1, even at a price point of N1,000. This positions Nigeria considerably lower than the global average petrol price, which currently stands at N1,922 per litre—approximately double the Nigerian cost.
The report indicates that the average petrol price in Nigeria is currently $0.6 per litre, although it recently surged to an average of N940 following the Dangote refinery’s decision to cease sales of petroleum products in naira. A comparative analysis of petrol prices across West Africa underscores Nigeria’s advantageous position. In Liberia, a litre of petrol costs N1,365, while Ghana’s price reaches N1,611. The Benin Republic, Togo, Cape Verde, and Guinea record progressively higher prices, ranging from N1,778 to N2,170 per litre. Similarly, Burkina Faso, Sierra Leone, Ivory Coast, Senegal, and Mali all experience petrol prices exceeding N2,000 per litre.
Globally, Libya claims the title of cheapest petrol, with a price of N42 per litre, followed by Iran at N45 and Venezuela at N54. Angola, Egypt, and Kuwait offer petrol at comparatively moderate prices ranging from N512 to N533 per litre. At the opposite end of the spectrum, Hong Kong bears the burden of the highest petrol price globally, at a staggering N5,410 per litre. Other high-price countries include Iceland, Denmark, the Netherlands, and Israel, with prices ranging from N3,128 to N3,655 per litre.
The report highlights a general correlation between national wealth and petrol prices. Richer countries tend to impose higher petrol prices, while poorer nations, especially those involved in oil production and export, enjoy significantly lower prices. The United States presents a notable exception to this trend, boasting relatively low petrol prices of around N1,413 per litre despite its advanced economy. This departure from the norm further underscores the complexities and nuances of global petrol pricing.
The primary driver of price discrepancies between countries lies in the varying taxes and subsidies applied to petrol. While all countries have access to the same international petroleum market prices, their individual tax policies significantly influence the final retail price. This explains why seemingly similar economies can experience drastically different petrol costs. The underlying principle is simple: higher taxes translate to higher retail prices, while subsidies effectively lower the cost for consumers. This interplay of taxes and subsidies forms the cornerstone of petrol pricing policies worldwide.
Until recently, Nigeria operated under a subsidized petrol regime, with prices kept artificially low below N200 per litre. This policy, while benefiting consumers, placed a significant strain on government finances. However, with the inauguration of President Bola Tinubu, a decisive shift occurred. The fuel subsidy was abruptly removed, leading to a sharp price increase. This jump in petrol prices, ranging from N920 to N970 depending on location, has sparked public outcry and concerns about affordability, especially for those accustomed to the subsidized rates. The removal of the subsidy represents a major policy shift, the long-term consequences of which remain to be seen.
