As fuel crisis bites harder, government response in Nigeria remains absent

A month after the outbreak of war in Iran, Nigerians are grappling with the sharpest fuel price surge globally, yet with little to no government intervention to cushion the impact.

Petrol prices have climbed from over ₦800 per litre to nearly ₦1,400 across major cities, representing a roughly 60% increase, the highest jump recorded among comparable economies, according to industry data.

Despite the severity of the crisis, neither the federal government nor most state governments have announced relief measures for citizens already burdened by a prolonged cost-of-living crisis.

The only intervention so far, even if relatively little, has come from Oyo State, where Governor Seyi Makinde last week approved a ₦10,000 monthly transport allowance for civil servants. The support is to take effect in April and last three months. While welcomed, the measure excludes the vast majority of Nigerians, particularly informal workers and the unemployed who make up a large share of the population.

The surge in prices follows global energy disruptions triggered by the conflict in the Middle East, where attacks on Iran by the United States and Israel, and Iran’s retaliation against its neighbours, have severely disrupted oil shipments through the Strait of Hormuz, a critical route for about one-fifth of global energy supply.

Global crude prices have since jumped above $100 per barrel, pushing up fuel costs worldwide. However, the impact has been far more severe in Nigeria, where market-based pricing and absence of social support have fully exposed consumers to global volatility.

President Bola Tinubu removed fuel subsidies in 2023, a move praised by investors and international bodies but widely criticized at home for triggering an unprecedented spike in living costs. At the time, the government pledged that savings from the subsidy removal would be redirected into infrastructure and social support programmes.

Nearly two years later, those benefits have not materialized. Despite the scale of hardship following subsidy removal, there has been limited transparency around how the savings have been utilized by the federal and state governments.

“There is no help anywhere,” a government worker in Abuja said, not wanting to be named as civil servants are not allowed to speak to the media without permission. “Everything has gone up, except income. Nigerians are on their own.”

Nigeria’s vulnerability has been further exposed by structural issues in its oil sector. The much-anticipated Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, was expected to stabilize domestic fuel supply, that long relied on imported refined products despite being Africa’s largest crude producer.

But its impact has been limited by difficulties in sourcing crude locally.

A significant portion of Nigeria’s oil production is tied up in pre-export financing deals and oil-backed loans managed by the Nigerian National Petroleum Company Limited, leaving limited volumes available for domestic refining. As a result, the refinery continues to import crude at international prices, passing costs on to consumers.

Unlike some African peers, Nigeria does not maintain a strategic fuel reserve that could cushion short-term supply disruptions, according to Reuters. Countries such as Ghana and Kenya have used price controls or regulatory mechanisms to limit increases, resulting in far smaller price hikes.

In Nigeria, however, the Tinubu administration has continued with its hands-off approach. Finance Minister Wale Edun recently said the government was monitoring the situation but would not interfere with what he described as an “orderly market pricing system,” instead focusing on long-term economic adjustments.

For millions of Nigerians, that approach offers little immediate comfort.

Transport costs have surged nationwide, with fares doubling in some cities. Food prices, already elevated, are climbing again as logistics costs rise. Small businesses that rely on petrol and diesel generators, due to the country’s unreliable electricity grid, are also struggling to stay afloat.

Labour unions and business groups have called for emergency interventions, including temporary subsidies, tax relief for refiners, and policies to prioritise naira-based crude supply for domestic processing.