«“Our [fuel] price is lower than that of the US. The United States is the highest producer of crude oil today, and one of the countries with the highest level of refineries. Today the price in the US is higher than that of Nigeria,” said the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri.»
The statement by the minister raises a fundamental question about how an oil-producing country should balance international market realities with the economic welfare of its own citizens.
There is nothing particularly complicated about comparing the price of a commodity with the income of the people who consume it. Yet, in Nigeria, simple arithmetic often appears to become “calculus” or “further mathematics” whenever the subject is the economy.
I do not see why Nigeria cannot develop a system in which the price of Premium Motor Spirit (PMS) for local consumption is detached, or at least substantially insulated, from international pricing, provided the mechanism is transparent, fiscally sustainable and does not create opportunities for arbitrage and smuggling.
The argument is not that Nigeria should pretend international crude prices do not exist. Rather, the question is whether the domestic price of refined petroleum products must automatically expose Nigerian households and businesses to every movement in the international oil market, particularly when Nigeria is itself a major crude-oil producer and now has significant domestic refining capacity.
Recent developments demonstrate why the issue deserves serious consideration. Petrol prices in Nigeria have climbed to around ₦1,400 per litre in Lagos and Abuja, and as high as ₦1,500 in parts of northern Nigeria, amid rising international crude prices. Reuters also reported that the Dangote refinery had been operating at full capacity while its wholesale PMS price had risen to about ₦1,350 per litre because of higher crude costs.
Other oil-producing countries provide useful points of comparison.
In Saudi Arabia, Aramco's official September 2026 retail prices put Gasoline 91 at SAR2.18 per litre. At approximately ₦365.8 to the Saudi riyal, that is about ₦798 per litre. Gasoline 95 is SAR2.33, or roughly ₦852 per litre.
Saudi Arabia's wage structure also illustrates the importance of considering fuel prices alongside income. The Saudi government established SAR4,000 as the minimum monthly wage level for a Saudi worker to be counted fully under its Nitaqat Saudization programme. This is approximately ₦1.46 million at the cited exchange rate. It should, however, be described accurately as a Saudization wage-counting threshold rather than a universal minimum wage for every worker.
In Libya, petrol is even more heavily subsidised. The reported retail price on September 21, 2026 was LYD0.15 per litre, equivalent to roughly ₦31 per litre at about ₦208 per Libyan dinar.
Iran also maintains a heavily subsidised fuel system. Regular motorists can obtain 60 litres per month at 15,000 rials per litre and another 50 litres at 30,000 rials. Fuel consumed beyond the 110-litre threshold is now priced at 100,000 rials per litre.
The United Kingdom, which is not a major crude-oil producer on the scale of Saudi Arabia or Nigeria, provides another useful contrast. From April 2026, its National Living Wage for workers aged 21 and above is £12.71 per hour.
These examples do not mean Nigeria should simply copy another country's subsidy model. Each country has different fiscal capacity, population, refining capacity, exchange-rate conditions and social-welfare systems.
But they demonstrate an important principle: oil-producing countries can make deliberate policy choices about how much of international energy-price volatility is transmitted directly to domestic consumers.
For Nigeria, the objective should therefore be a credible domestic petroleum-pricing framework that reflects the country's economic realities while ensuring that refiners, marketers and investors remain commercially viable.
Most importantly, Nigeria needs a system that reduces the burden of energy costs on households, transport operators, farmers, manufacturers and other businesses.
The debate should therefore move beyond the simplistic question of whether petrol is “cheaper than America.” The more important question is: what fuel-pricing structure can Nigeria realistically sustain while protecting domestic production, encouraging investment and making energy affordable enough for Nigerians and Nigerian businesses to remain productive?
That is the arithmetic Nigerians deserve to see clearly.
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