Experts and civil society organizations are divided over calls for the administration of Bola Ahmed Tinubu to introduce palliatives or reinstate fuel subsidies to cushion the impact of soaring petrol prices triggered by rising global crude oil costs.

The spike in oil prices follows the 24-day conflict involving Iran, the United States and Israel, which has disrupted global energy markets and pushed crude prices above $100 per barrel— far above Nigeria’s 2026 budget benchmark of $64 per barrel.

While the surge has boosted Nigeria’s oil revenue in recent weeks, it has also worsened domestic economic conditions.

Petrol prices have jumped by about N492, or 56 percent, rising to between N1,367 and N1,390 per liter as of Monday, March 23, 2026, from N875 recorded before February 28.

The increase has triggered higher transport fares and food prices, further eroding the purchasing power of millions of Nigerians, particularly those earning the N70,000 minimum wage.

Amid growing hardship, some stakeholders have called on the government to introduce relief measures to ease the cost-of-living crisis.

The Centre for the Promotion of Private Enterprises (CPPE) has urged the Federal Government to adopt a coordinated policy framework to prevent energy-driven inflation.

In a statement, CPPE’s Chief Executive Officer, Muda Yusuf, warned that the Middle East crisis could reverse Nigeria’s disinflation trend, which stood at 15.06 percent in February.

Similarly, the president of the Nigeria Labour Congress, Joe Ajaero, said the government should not wait for industrial action before intervening.

“The government is making huge revenues from the crisis, which has also doubled the budget benchmark.

“The government should use part of these funds to cushion the impact on citizens,” he said.
Oyo State government recently approved N10,000 wage allowances for its civil servants to cushion the surge in fuel prices.

However, experts who spoke with DAILY POST remain divided on the appropriate response by the Nigerian government.

Fuel Subsidy return misconceived– Prof emeritus, Wumi provides alternative solutions

A professor emeritus of petroleum economics, Wumi Iledare, dismissed calls for the return of fuel subsidy, describing them as misguided and economically unsustainable.

“The position by some stakeholders advocating a return to fuel subsidy to cushion recent petrol price spike appears misconceived and difficult to justify.

“Consumer fuel subsidies tend to create market inefficiencies and significant welfare losses,” he told DAILY POST.
According to him, past subsidy regimes have diverted resources away from critical sectors such as healthcare, education, infrastructure and power.

“Evidence over the past two to three decades suggests that subsidy regimes often crowd out critical public investments,” he added, warning that a return to subsidy would be ill-advised.

Instead, Iledare recommended targeted social interventions, improved governance in the energy sector and strategic use of oil windfalls to strengthen economic resilience.

He also suggested policy options such as crude oil discounts for local refineries, including the Dangote Refinery, as well as the removal of import duties or Value Added Tax on petrol products to ease costs.

Tinubu’s govt lacks pro-people policies – Rafsanjani

On the other hand, the Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC) and Transparency International Nigeria, Auwal Rafsanjani, called for urgent pro-people policies to address the hardship.

“First and foremost, Nigerian leaders need to have a package for relief to mitigate the suffering of Nigerians in all ramifications,” he said.

Rafsanjani criticized what he described as the absence of “sympathetic” and “pro-poor” policies, warning that the situation could worsen if urgent action was not taken.

“The money from the subsidy removal has not translated into mitigating Nigerian suffering,” he said, adding that political priorities ahead of elections may be overshadowing governance.

Describing the situation as a disconnect between leaders and citizens, he stressed the need for inclusive policies that prioritize the welfare of ordinary Nigerians.

“We have a governance system and political leaders that are not pro-poor and not interested in putting systems in place to mitigate the suffering of Nigerians,” he said.

The Organised Private Sector and the Nigeria Labour Congress on Monday called for urgent government intervention as petrol prices surged towards N1,400 per litre across parts of the country, raising fears of worsening inflation, job losses, and business closures.

The development follows successive price increases by the Dangote Petroleum Refinery, which recently raised its ex-depot price to about N1,275 per litre, marking its fifth hike in March. The price hikes have intensified concerns over pricing dynamics in Nigeria’s deregulated downstream petroleum sector.

Following the last hike over the weekend, petrol prices jumped from N1,240 to nearly N1,400, depending on the location. Reports have it that the petrol prices are higher in the North, while those in Lagos and Ogun still buy at the rates around N1,340.

The surge in petrol prices was triggered by the US-Israel-Iran war in the Middle East. As oil prices rise, the Dangote refinery also hikes fuel prices in Nigeria, fuelling an increase in the cost of living.

From an average of N839 before February 28, a litre of petrol has risen by about N500. Analysts fear that the price could hit N1,500 to N2,000 if the crisis continues with the Strait of Hormuz closed.

Speaking with The PUNCH, stakeholders, in separate interviews, urged the Federal Government to introduce immediate relief measures, including tax incentives for refiners, naira-based crude supply, and temporary subsidies, while accelerating long-term reforms in the energy sector.

However, the regulator and marketers argued that the Federal Government cannot cap petrol prices as done in China, saying the sector is deregulated.

NLC laments

The Nigeria Labour Congress said Nigerians are paying the price for alleged monopoly in the downstream petroleum sector. The NLC Assistant Secretary-General, Onyeka Chris, told The PUNCH that the poor Nigerian workers and the masses are “reaping the consequences of adopting a monopolist”.

The union drew parallels with the cement industry, questioning why Nigerian-made cement is reportedly more expensive than in neighbouring countries like Ghana or Rwanda.

The NLC emphasised that the downstream petroleum market operates as a “seller’s market”, in which dominant players control prices. “A monopoly commands the market. The seller determines the price and fixes it the way he wants,” the labour group said.

It added that statistics show Nigeria has the highest income credit for refined petroleum products, yet ordinary Nigerians receive none of the benefit. The union also blamed the government, saying, “The government sponsors them, repairs them, compensates them, and makes them the monopolist.”

It added that public refineries could operate efficiently if the existing workforce were properly engaged and managed. The NLC warned that Nigerians must organise to counter the economic concentration.

“Until we organise ourselves and exercise our sovereign will, there will be no mercy. We will not benefit from this country. Unions, workers, students, artisans, and citizens need to act together to challenge monopolistic control over essential commodities,” the NLC official stated.

The Congress added that the monopolistic control in the petroleum sector reinforces calls for urgent government action to ensure fair fuel pricing and protect consumers.

Also, the Acting Secretary-General of the NLC, Benson Upah, told one of our correspondents that geopolitical upheavals in the oil-rich Middle East have historically triggered shocks in the global oil market, but Nigeria’s vulnerability has been amplified by weak domestic buffers.

Upah noted that countries with stronger economic management typically maintain strategic petroleum reserves to cushion such shocks. “In anticipation that conflicts are inevitable and could rapidly degenerate, serious governments build strategic reserves by way of massive storage tanks,” he said.

He, however, stressed that such reserves were not permanent solutions but temporary buffers designed to stabilise markets and give governments time to respond.

“Strategic reserves are no permanent solutions.

They are intended to minimise sudden shocks or impacts as well as give the government time to respond more coherently to the unravelling of the market,” he added.

The labour leader questioned Nigeria’s preparedness, arguing that the near-instantaneous impact of the crisis suggests either an absence of reserves or a failure to deploy them effectively. “The impact on us was instantaneous, suggesting there were no reserves, and if, per chance, there were, they were not released,” Upah stated.

On policy responses, Upah cautioned against adopting price caps, noting that Nigeria’s economic structure differs significantly from countries like China, where such measures have been used.

“Price caps are not it. We run two different economic systems. Whereas theirs might be working perfectly well, such a decision here could lead to unintended consequences,” he said.

Instead, he advocated a temporary subsidy framework targeted at “the source” to cushion consumers without distorting the broader market. “The government should provide temporary subsidies at the source. That will be beneficial to all,” he added.

More fundamentally, the NLC chief called for a structural shift in Nigeria’s oil and refining strategy, urging the Federal Government to supply crude oil in naira to domestic refineries, including the Dangote refinery.

“The government is advised to sell in naira enough crude to the Dangote refinery and any other functional refinery to process crude for local consumption and the surplus for export,” Upah said.

While higher global oil prices typically boost government revenues, Upah warned that the current windfall may not be sufficient to offset the broader economic fallout. “Although the government is making stupendous money from the crude oil market at the moment, I doubt the windfall will be sufficient to cover our needs,” he said.

The NLC boss also warned of a potential inflation spiral driven by rising energy costs, which could trigger wider economic and social consequences. “It is of utmost importance that the government takes proactive measures to protect the gains of its policies by pre-empting or managing inflation spirals and shutdowns due to prohibitive energy costs. These things have their social dimensions we can’t readily predict,” Upah said.

Upah concluded by urging the government to prioritise citizen welfare, noting that even non-oil-producing countries often deploy protective measures during global crises. “In light of this, if non-oil-producing countries offer some level of protection to their citizens in these precarious times, we expect our government to do more,” he said.

OPS speaks

The President of the Lagos Chamber of Commerce and Industry, Leye Kupoluyi, said excessive taxation on refineries was a major contributor to high pump prices and urged the government to review the fiscal burden.

Kupoluyi added that multiple taxes imposed on refiners ultimately translate to higher fuel prices for consumers, stating, “There are 40 different types of taxes on them. Can the government look at it and track down some of those taxes? Because at the end of the day, those taxes go back to the public price. I think that’s what the Federal Government needs to do. That is the only way we can show our clarity to our customers.”

Amid concerns that the Dangote refinery could become the sole determinant of petrol pricing in Nigeria, Kupoluyi dismissed the narrative as simplistic, noting that market realities often favour dominant players.

“To me, I think Dangote has been very fair in his prices. For many markets in the environment, the person who had the largest recovery seemed to dominate when they were not even dominating nationally. That’s what we expected,” he stated.

He stressed the need for collaboration between the government and refiners to ensure fair pricing, adding that there’s no other refinery in the country with a similar capacity to Dangote’s.

Similarly, the Director-General of the Nigerian Employers’ Consultative Association, Adewale Oyerinde, said global crude oil realities continue to shape domestic fuel prices, limiting the ability of local refiners to sell below international benchmarks.

Oyerinde said, “The reality of global crude prices is staring us in the face, and Nigeria is not insulated from the effects. The same situation is faced by other global oil producers. The Dangote refinery, being a private enterprise, is also forced to buy or import crude at the international price, which makes it impossible not to sell at the appropriate global price.”

He, however, urged the government to deploy short-term relief measures, including tax incentives, while charting a long-term transition to cleaner energy sources.

“While short-term interventions by the government to cushion the negative economic effects on citizens are desirable, the reality of moving away from dependence on fossil fuel to clean energy remains a more sustainable solution,” Oyerinde stated.

Also, the Nigeria Employers’ Consultative Association warned that if rising global oil prices continue unchecked, Nigeria risks business closures, job losses, and a deeper cost-of-living crisis.

NECA stressed that the situation is translating into increased energy costs in Nigeria, with significant consequences for businesses and households.

In a statement on Monday, the Director-General of NECA, Mr Adewale-Smatt Oyerinde, in reaction to ongoing tensions in the Middle East and their impact on global oil markets, noted that the current trend is driving up domestic fuel prices and worsening inflationary pressures across the economy.

He stated that the situation reflects a growing paradox, where increases in crude oil prices are pushing up domestic energy costs, placing pressure on businesses and eroding the purchasing power of citizens.

“What we are witnessing is Nigeria’s oil paradox. Rising crude oil prices are pushing up domestic energy costs, squeezing businesses and worsening the cost of living for citizens. If this trend continues unchecked, we risk business closures, job losses, and a deeper cost-of-living crisis,” Oyerinde said.

The NECA boss noted that fuel prices have risen sharply in recent days, with petrol prices in some locations exceeding N1,300 per litre and diesel approaching N1,800 per litre.

He stressed that energy costs sit at the heart of Nigeria’s economy, and energy is the engine of production and distribution. “Once fuel prices rise, the effects are immediate and widespread; transport costs increase, food prices rise, and the overall cost of doing business escalates,” he stated.

According to him, businesses, particularly in manufacturing, agriculture, and logistics, are already under significant pressure. “For many firms that rely on diesel for operations, current price levels are becoming increasingly difficult to sustain. Profit margins are shrinking, and businesses are being forced to either pass on costs or scale down operations,” Oyerinde stressed.

Oyerinde mentioned that while the Middle East conflict has contributed to the rise in oil prices, the impact is exposing deeper structural weaknesses, underinvestment, weak infrastructure, and inefficiencies in Nigeria’s energy value chain.

“This situation is not only driven by external factors; it is also reflecting ongoing constraints within the energy value chain, including supply inefficiencies and infrastructure limitations,” he said.

He urged the government to stabilise the downstream sector and support vulnerable industries. “The government must act swiftly to ease supply constraints, stabilise prices, and provide targeted relief for critical sectors,” he pleaded.

He cautioned that if properly managed, this could strengthen the nation’s economy; “if not, the gains from rising oil prices will be completely eroded by inflation and economic hardship.”

Regulator, marketers react

In China, the government on Monday limited the amount by which the country’s fuel costs can rise, to mitigate surging oil prices due to the Middle East war.

“To mitigate the impact of abnormal increases in international oil prices, ease the burden on downstream users, and ensure stable economic operations and public welfare, temporary regulatory measures have been adopted,” China’s state planner said in a statement.

But regulators and marketers of petroleum products in Nigeria rejected price capping, saying Nigeria’s petroleum sector is a deregulated market.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority told The PUNCH on Monday that limiting price hikes is like proposing a price cap, saying this is equal to regulating an already deregulated market.