Nigeria faces a policy dilemma as soaring global crude oil prices, triggered by recent Middle East conflict, have driven domestic petrol costs to record levels, sparking divided calls for government intervention. While higher oil revenues have boosted state coffers, the surge has intensified inflation and eroded living standards, prompting stakeholders to debate the reintroduction of fuel subsidies versus targeted relief measures.
Petrol prices jumped approximately 56% to between N1,367 and N1,390 per liter by March 23, 2026, from N875 before February 28. This followed a spike in Brent crude above $100 per barrel—significantly exceeding Nigeria’s 2026 budget benchmark of $64. The price hike has directly increased transport and food costs, severely impacting citizens, especially those on the N70,000 minimum wage.
In response, the Centre for the Promotion of Private Enterprises (CPPE) urged a coordinated policy framework to prevent energy-driven inflation, noting the disinflation trend could reverse. The Nigeria Labour Congress (NLC) demanded that a portion of the increased government revenue be used to cushion citizens, with the Oyo State government approving a N10,000 wage allowance for civil servants.
However, experts are split on the solution. Professor Emeritus Wumi Iledare of petroleum economics described calls to restore fuel subsidies as “misconceived and economically unsustainable.” He argued past subsidies diverted funds from healthcare, education, and infrastructure, creating market inefficiencies and welfare losses. Instead, he advocated for targeted social interventions, crude oil discounts for local refineries like Dangote, and removal of import duties or VAT on petrol products.
Conversely, Auwal Rafsanjani of the Civil Society Legislative Advocacy Centre (CISLAC) criticized the absence of “pro-poor” policies, stating that revenue from previous subsidy removal had not alleviated suffering. He called for urgent, inclusive relief measures, warning of a disconnect between political leadership and the public amid heightened hardship.
The situation underscores the tension between fiscal prudence and social welfare as Nigeria’s administration navigates a windfall from high oil prices against a backdrop of widespread economic strain. The path chosen will have significant implications for inflation, public trust, and long-term economic resilience.
