The price of Premium Motor Spirit (petrol) soared from N175 per litre in May 2023 to as much as N1,300 by May 2026—a staggering increase of approximately 643 per cent in three years, according to The PUNCH.
This unprecedented surge was primarily driven by President Bola Tinubu’s removal of petrol subsidies immediately after his inauguration on May 29, 2023. The move caused prices to jump overnight from N175–N200 per litre to over N500. The situation was further exacerbated by the sharp devaluation of the naira, making imported petrol even more expensive for Nigerians.
By 2026, petrol prices at filling stations had climbed to between N1,300 and N1,400 per litre, varying by location. The recent spike from around N800 to N1,300 per litre was partly attributed to tensions in the Middle East and the closure of the Strait of Hormuz, which disrupted global oil supplies.
Following his inauguration, President Tinubu declared, “the fuel subsidy is gone,” prompting the Nigerian National Petroleum Company Limited (NNPC)—then the sole importer—to raise pump prices. This action contradicted his campaign promise in Abeokuta to lower petrol prices, and it triggered a nationwide inflationary spiral.
When the government floated the exchange rate in June 2023, petrol costs surpassed N1,000 per litre. In response, the NNPC quietly introduced what the International Monetary Fund described as an implicit subsidy. Though the landing cost hovered around N1,200, the NNPC sold petrol at roughly half that price, with the government covering the difference, a practice known as under-recovery.
For nearly a year, NNPC denied subsidy payments but kept prices at about N600 per litre. In 2024, it finally acknowledged selling below cost. Umar Ajiya, former NNPC Chief Financial Officer, revealed that the government had instructed the company to sell at prices far below import costs, with the government making up the shortfall.
After this admission, pump prices rose to around N1,080 per litre—coinciding with the launch of the Dangote Petroleum Refinery’s petrol offering. The Dangote refinery ignited a price war in late 2024 by slashing prices, pushing the market rate to N800–N900 per litre. However, when the US-Iran conflict erupted in February 2026, international oil price shocks forced the refinery to raise its prices, and filling stations quickly followed suit, selling petrol at N1,300 and higher.
The renewed petrol price hike has fueled another round of inflation, raising transportation costs and the prices of goods and services. In response, the government launched the Presidential Initiative on Compressed Natural Gas (CNG) to encourage the adoption of CNG as a cheaper alternative to petrol and diesel. However, this measure has yet to significantly ease the cost of living.
As petrol prices leapt from N800 to N1,300, calls intensified for the government to cushion the blow on ordinary Nigerians. Energy economists have advocated for targeted cash transfers to support vulnerable households. Professor Adeola Adenikinju, former president of the Association of Energy Economists, described the situation as a “two-edged sword”—higher oil prices bring more revenue, but also intensify economic hardship for the population. He emphasized the need for direct cash interventions to help the most affected, noting that current relief measures, such as increased allowances for civil servants, exclude many in the private and informal sectors.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), criticized the government for failing to provide relief despite windfall crude oil revenues. He warned that petrol prices could exceed N1,500 per litre if the Middle East crisis persists, and urged the government to implement policies that would reduce transportation and food costs.
Economist Bismarck Rewane suggested that the Federal Government could supply crude to the Dangote refinery at a fixed price to stabilize refined product costs. However, authorities have dismissed the possibility of reintroducing subsidies or imposing price controls. Finance Minister Taiwo Oyedele reiterated that Nigeria remains committed to a market-driven regime, arguing that subsidies distort the economy and are not coming back.
In summary, the dramatic rise in petrol prices over the past three years has had far-reaching economic and social consequences, and while measures have been proposed to cushion the impact, the government continues to prioritize market reforms over direct intervention.
