Petrol Prices in Nigeria: Why Owning Crude Oil Doesn't Guarantee Cheap Fuel

The high price of petrol in Nigeria is a concern for many citizens, especially when considering that the country produces crude oil and has invested heavily in domestic refining capacity. However, it's essential to understand that owning crude oil does not guarantee cheap petrol.

Crude oil must be extracted, transported, refined, stored, distributed, and sold before becoming petrol, with each stage contributing to its final price. In 2023, Nigeria produced between 1.57 million and 1.78 million barrels of crude oil daily, but it still relies heavily on imported machinery and industrial materials.

The Dangote Refinery has improved domestic supply and reduced dependence on imported petrol, but local refining does not completely disconnect Nigeria from the global market. The refinery must purchase crude oil at an international price, which affects the final cost of petrol.