The cost of Premium Motor Spirit (petrol) has surged dramatically in Nigeria, rising from about ₦175 per litre in May 2023 to between ₦1,300 and ₦1,400 in May 2026, representing an increase of roughly 643 per cent within three years, according to The PUNCH.
Findings indicate that the sharp escalation was largely triggered by the removal of fuel subsidy by President Bola Tinubu shortly after assuming office on May 29, 2023. The policy shift, combined with the depreciation of the naira, significantly increased the cost of imported fuel and worsened affordability for consumers.
At present, petrol sells at filling stations across the country within the ₦1,300–₦1,400 range, depending on location.
The recent spike, from around ₦800 just months earlier to current levels, has also been linked to renewed instability in the Middle East, which disrupted global oil supply following tensions around the Strait of Hormuz.
Immediately after the subsidy removal announcement, pump prices rose sharply from about ₦175 or ₦200 to over ₦500 per litre. The Nigerian National Petroleum Company Limited (NNPCL), then the dominant importer, led the initial price adjustments.
Although the policy move was defended as economically necessary, it contradicted earlier campaign assurances that fuel prices would be reduced, sparking nationwide debate. The reform also contributed to a rise in inflation and transport costs across the country.
Further pressure came in June 2023 when the government floated the exchange rate, pushing petrol prices above ₦1,000 per litre in some markets.
During the transition period, the NNPCL reportedly maintained prices below landing cost through what the International Monetary Fund described as an “implicit subsidy,” also referred to as under-recovery. At the time, petrol was sold at about ₦600 per litre despite landing costs nearing ₦1,200.
Former NNPCL Chief Financial Officer, Umar Ajiya, later explained that the company had been instructed to sell fuel below cost price, with government expected to cover the shortfall.
By 2024, the corporation acknowledged selling petrol below actual landing costs, after which prices climbed further to around ₦1,080 per litre.
The emergence of the Dangote Petroleum Refinery later reshaped market dynamics, triggering price competition and briefly reducing pump prices to between ₦800 and ₦900. However, renewed global tensions, particularly the US-Iran conflict in early 2026, led to fresh increases as refinery gantry prices rose repeatedly.
The latest price surge has again pushed transport fares and commodity prices upward, worsening inflationary pressure on households.
In response, the Federal Government introduced the Presidential Compressed Natural Gas (CNG) Initiative to promote alternative fuel use, though its impact on living costs remains limited.
Economists and energy experts have called for targeted interventions, including direct cash transfers to vulnerable Nigerians, to cushion the impact of rising fuel costs. They warn that higher petrol prices continue to deepen economic hardship, especially among low-income households.
While some analysts suggest temporary relief measures for workers, concerns remain that such interventions exclude informal sector workers who make up a large portion of the population.
Petroleum marketers also expressed concern over government inaction, urging authorities to deploy relief measures to ease transport costs and inflationary pressures.
Some energy economists have proposed crude-for-fuel pricing arrangements between the government and local refineries as a possible stabilisation strategy, while others suggest direct fiscal support for citizens.
However, the Federal Government has maintained its position against subsidy reinstatement or price controls, insisting on a market-driven system. Officials argue that subsidy removal is irreversible, citing the need to avoid long-term economic distortions.