Wednesday April 08, 2026

Nigeria paid N699 per litre for petrol on January 1. It's paying N1,275 today.

The distance between those two numbers is not a policy failure. It's a war in a region Nigeria has no part in, filtered through a market mechanism that was designed to do exactly what it's doing. Dangote's 650,000-barrel-per-day refinery supplies 60% of Nigeria's fuel. It has raised its gantry price nine times since January -- six increases, three brief reductions -- each one following the movement of Brent crude. When crude crossed $112 a barrel in March, the refinery raised its price within hours. When crude dipped below $100, it came down. When crude went back up, so did the pump price. This is what deregulation looks like when it's working correctly.

Before the Dangote refinery came online, the argument for subsidy removal carried a built-in reassurance. Once Nigeria refines its own fuel, global price shocks won't hit domestic consumers the same way. The logic held that local production would create a buffer. What the logic missed was that local production priced against global benchmarks creates a transmission line, not a buffer. The refinery doesn't absorb the shock. It relays it, efficiently and in real time.

The historical echo here is 2012. Jonathan's government attempted to remove the fuel subsidy in January of that year, and half of Nigeria shut down for a week. The NLC called a general strike. Protesters filled Gani Fawehinmi Park in Lagos and the streets of every major city. The government reversed course within days, restoring the subsidy and reconstituting a committee to review the removal plan. What's different now is that the removal happened in stages, the Dangote refinery gave it a local face, and the price increase arrives not as a single government announcement but as a gantry price adjustment from a private company responding to market forces. The politics are cleaner. The pain is the same. When NNPCL stations raised prices to N1,367 last week, they cited Dangote's upstream adjustment as the reason. The government and the refinery each point to market forces. The person at the pump just sees the number change.

There's a complication that matters here. Aliko Dangote has warned publicly that "everyone will feel it" if the Iran war escalates. He is right. He is also the person setting the price that everyone is feeling. The refinery he spent fifteen years building is now simultaneously Nigeria's energy security and its inflation accelerant. Both things are true. The refinery gives Nigeria something genuinely valuable -- no queues, no shortages, no import delays, no margins stacked on top of international shipping costs. What it doesn't give is price security, because price security in a deregulated market requires either a subsidy or crude prices that stop moving. Neither is available.

In Abuja, petrol sells between N1,300 and N1,450 at the pump today. Diesel approaches N2,000 per litre. The NLC is calling for urgent government intervention. PETROAN, the retailers' association, has warned that prices could reach N2,000 for petrol and N3,000 for diesel if the war persists. The keke driver who moved from Minna to Abuja looking for work is spending the majority of what he earns just getting to the roads where he works. His margin disappears every time the gantry price moves.

The government earns more when oil is expensive. The federation account benefits from every dollar Brent rises above the $64.85 per barrel budget benchmark. What the government's windfall and the pump price have in common is the same barrel of crude. What they don't have in common is who absorbs the cost of that barrel on the way from the ground to the tank. Nigeria ranks fourth globally on the terrorism index and exports roughly 1.5 million barrels of oil a day into a market rewarding it handsomely. The ordinary Nigerian at the fuel station shares neither the ranking nor the revenue. They share only the consequence.

The refinery solved supply. It inherited the price problem.

Dangote himself has acknowledged the bind. He owns the refinery. He also understands, better than most, that the refinery's pricing model is not a political choice but a commercial one. If the refinery priced below global benchmarks it would be selling at a loss, and a loss-making refinery eventually closes. The argument for deregulation was always that market pricing would attract private investment, and private investment would expand supply. That logic has worked -- the refinery exists and is running at capacity. The part of the argument that didn't survive contact with a war in the Persian Gulf was the assumption that global oil prices would stay stable enough that market pricing and affordable domestic prices could coexist.

They can't when Brent is above $100.

So ordinary Nigerians are inside a structure where the government earns more from every price shock, the refinery passes the shock through to the pump, and nobody in the chain has both the incentive and the ability to absorb the cost on the consumer's behalf. The subsidy system that used to do that -- imperfect, corrupt, and fiscally unsustainable as it was -- is gone. What replaced it works better for supply and worse for the person at the bottom of the chain.

The next time Brent crude moves, so will the price at your nearest station. The refinery makes that faster now, not slower.