Experts have expressed deep concern over the recent surge in petrol prices in Nigeria, which has reached unprecedented levels. They argue that the current pricing, exceeding N1,100 per litre, is unsustainable and poses a significant threat to the nation’s economy and the well-being of its citizens.

Mojeed Dahiru and Ayo Akinfe, who were guests on the Friday edition of Inside Sources with Laolu Akande, a socio-political programme aired on Channels Television, noted that the increase in petrol prices has impoverished Nigerians—who currently earn minimum wage stands at N70,000—reduced productivity and created a serious economic crisis.

They contend that market forces should not dictate fuel prices, particularly when energy security is a matter of national importance.

Dahiru expressed his belief in subsidy, saying, “I believe that every nation must determine citizens’ affordability threshold for energy prices because energy is the oxygen of the economy.”

He called for government intervention to regulate prices and ensure that they remain within the reach of the average Nigerian.

He further explained, “What oxygen or air is to the living thing is what oxygen or air is to the economy. So, I do not believe that the price of energy at all times should be controlled by market forces.” Dahiru added that with refineries now operational in Nigeria, the government can intervene, either from the production side or the utilization side, to ensure energy prices fall below the affordability threshold for Nigerians.

He compared the situation in Nigeria to what is referred to as the “cost of living crisis” in the UK, stating, “In Nigeria, I can assure you that what we are having is a cost of existence crisis. The government must take up this role because energy security is a matter of national security. So, the government has a responsibility to intervene in pricing.”

Dahiru also highlighted the need for the Nigerian National Petroleum Company Limited (NNPCL) to ensure that the Old Port Harcourt Refinery, as well as the Warri and Kaduna Refineries, come online to help reduce the pressure on energy prices.

Ayo Akinfe, Chairman of the Central Association in the United Kingdom, agreed with Dahiru and suggested that nothing stops the federating units from operating their own refineries to boost product availability.

He noted, “What we’ve had in Nigeria is that cabals have created artificial scarcity to hike prices. If you have 20 to 30 refineries, that’s full capacity and it will cause prices to fall,” adding that “Ultimately, we need government policies that encourage investors to open refineries. For instance, we have 36 states. I don’t see why each state should not have at least one refinery to supply its people. That will bring prices down.”

Bretton Woods institutions like the World Bank and the International Monetary Fund have advocated for the removal of energy subsidies and the floating of the naira, saying that failure to implement these policies has plunged Nigeria into severe inflationary pressures.

After President Bola Tinubu’s inauguration in May 2023, he removed the petrol subsidy and floated the naira. Petrol prices then skyrocketed from less than N200 per litre to over N1,100 in many parts of the country, while the naira depreciated from around N700/$ to N1,600.

As a result, food and commodity inflation have surged, leaving Nigerians struggling with what is considered the worst cost of living crisis since the country’s independence over six decades ago.