An energy economist, Prof. Wumi Iledare, has attributed the recent rise in petrol prices, now ranging between N1,370 and N1,400 per litre, largely to internal economic pressures rather than fluctuations in international crude oil prices.
Speaking in an interview in Lagos, Iledare, Professor Emeritus of Petroleum Economics and Policy Research at Louisiana State University in the United States, said exchange rate instability remains the most influential driver of fuel pricing in Nigeria.
He explained that the petroleum market is still heavily dependent on the US dollar, adding that although facilities like the Dangote Refinery have begun operations, Nigeria continues to rely significantly on imported products.
According to him, this import dependence means that pump prices are still largely determined by international parity benchmarks rather than domestic production realities.
The economist also noted that the swift removal of fuel subsidies was not matched with the development of a fully competitive downstream sector, creating pricing pressure on consumers.
He said this gap has exposed the market to fluctuations caused by foreign exchange challenges, logistics constraints, and limited refining competition.
Iledare further observed that the ongoing transformation of the Nigerian National Petroleum Company (NNPC) Ltd. from a government agency into a commercial entity adds another layer of complexity to fuel pricing dynamics.
He warned that the effects of rising petrol costs extend across the economy, increasing transportation and production expenses, fueling inflation, reducing household purchasing power, and slowing industrial activity.
In a fuel-dependent economy, he noted, price adjustments quickly spread across multiple sectors.
The professor cautioned against reinstating broad fuel subsidies, describing them as financially burdensome and inefficient in the long run.
Instead, he recommended stabilising the exchange rate, improving local refining capacity, encouraging competition in the downstream sector, and upgrading infrastructure.
He also called for more targeted assistance to low-income households rather than general subsidies.
Iledare concluded that Nigeria’s fuel pricing issues are rooted in deeper structural and macroeconomic challenges that require sustained, long-term reforms.
Meanwhile, fuel prices across Lagos have continued to adjust upward, with many stations that previously sold petrol between N1,205 and N1,215 per litre now increasing their rates.
NNPC retail outlets in areas such as Fadeyi, Ikorodu, and Palmgrove are currently dispensing fuel at about N1,324 per litre.
Major marketers including MRS, Northwest, BOVAS, Ardova (AP), and Mobil have adjusted prices to between N1,334 and N1,350 per litre, while independent dealers such as Fagbems, Fanfar, Musarok, and Ranoil are selling between N1,350 and N1,424 per litre.
Fuel price pressures are expected to remain under close watch as market adjustments continue across the country.