By Farooq A. Kperogi
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Something extraordinary is happening across the world. Governments are losing sleep over the intolerably rising prices of petrol and diesel. They are cutting taxes, subsidizing fuel, capping prices, releasing strategic reserves, relaxing regulations and strong-arming oil companies. Where relief has not yet come, governments are promising it.
Tinubu’s Nigeria is the exception. It is marching callously and ignominiously in the opposite direction. It derives perverse joy and pride in its soulless, cold-hearted strangulation of the people.
A few examples of countries that are doing the exact opposite of Tinubu’s insensate destruction will suffice.
On Friday, October 2, the G7 agreed to release 100 million barrels of diesel and crude oil from emergency reserves to bring prices down. The decision followed pressure from the Trump administration, which had threatened restrictions on American diesel exports if European governments did not release their reserves. Oil prices fell almost immediately after the announcement.
Germany has cut taxes on petrol and diesel by 17 euro cents per liter through December and is discussing a fuel-price cap. Australia halved its petrol and diesel excise, shaving 26.3 Australian cents off every liter. Canada suspended its federal excise tax on gasoline and diesel.
Ireland cut petrol taxes by 27 cents per liter and diesel taxes by 32 cents. Spain proposed relief of up to 30 euro cents per liter. South Korea imposed a fuel-price ceiling. Brazil has subsidized gasoline and cut taxes. Italy leaned on major oil companies to cap petrol and diesel prices. Kenya cut VAT on petroleum products.
President William Ruto personally announced a reduction in diesel price after public protests over rapidly rising energy costs. His government had already spent substantial public funds cushioning fuel prices.
Ghana’s President John Mahama said his government was considering cutting fuel margins and reviewing a new petroleum levy to relieve the pain at the pump after petrol rose about 15% and diesel about 19% in one pricing window. He also raised the possibility of a supply agreement with the Dangote refinery.
My research for this column has documented at least 50 cross-continent national cases of state interventions designed to reduce the cost of petrol or diesel, and that’s not even an exhaustive global count.
In the United States, the Associated Press found this week that about one-third of U.S. states have implemented some form of fuel-tax relief alone. That does not count every regulatory waiver, supply measure or proposed tax holiday.
The mechanisms differ, but objective is unmistakably the same: to shield citizens and businesses from bearing the full brunt of an international fuel-price shock.
I am writing this column from Texas where I was invited to give a keynote address on Nigerian Independence at the University of Texas at Rio Grande Valley. I, of course, live in Georgia. The comparison of Texas and Georgia with Nigeria is both revealing and enraging.
On September 28, Texas Governor Greg Abbott issued a statewide disaster proclamation because of record diesel prices. He authorized expanded use of cheaper tax-exempt dyed diesel on Texas roads, relaxed weight restrictions and sought federal waivers intended to expand supply and reduce costs. Abbott said record prices threatened agriculture and freight and raised costs for every Texas family.
That same day, Georgia Governor Brian Kemp declared a state of emergency and suspended the state’s motor-fuel excise tax for 30 days. Georgia ordinarily taxes gasoline at 33.3 cents per gallon and diesel at 37.3 cents. Kemp suspended the taxes because, as his office put it, Georgians needed relief from global market volatility.
Now look at the prices. AAA put regular petrol at $3.94 per gallon in Texas and $3.96 in Georgia on October 1. A U.S. gallon is 3.785 liters. That works out to about $1.042 per liter in Texas and $1.046 in Georgia. At roughly ₦1,329 to the dollar, that is about ₦1,385 per liter in Texas and ₦1,391 in Georgia.
Petrol in Nigeria has recently hovered around ₦1,400 to ₦1,430 per liter, although NNPCL stations cut prices this week to about ₦1,360 in Lagos and ₦1,370 in Abuja.
That means petrol costs roughly the same in Nigeria as it does in Texas and Georgia. Yet Texas regards its diesel prices as disastrous enough for a statewide disaster proclamation. Georgia regards its fuel prices as sufficiently intolerable to declare a state of emergency and surrender tax revenue.
Nigeria regards almost the same nominal fuel price as “economic reform” that will yield an illusory El Dorado in an undefined future.
The obscenity of the contrast becomes starker when income enters the picture. The statutory minimum wage in Texas is $7.25 an hour. The same federal rate applies to most workers in Georgia. At 40 hours a week, that is about $1,257 a month. At current petrol prices, a minimum-wage worker earns enough in a month to buy roughly 1,200 liters of petrol.
Nigeria’s national minimum wage is ₦70,000 a month. At ₦1,400 per liter, it buys exactly 50 liters.
A minimum-wage worker in Texas or Georgia can therefore buy roughly 24 times as much petrol as a Nigerian minimum-wage worker, even though the pump prices are almost identical.
And Nigerians endure vastly inferior public transportation, unreliable electricity that forces households and businesses to buy fuel for generators and a road-dependent economy in which virtually every increase in petrol price cascades into food, transportation, rent and other costs.
Yet we have been conditioned to regard a demand for affordable petrol as some primitive Nigerian appetite for undeserved indulgence. I have consistently called this attitude an example of self-annihilating stupidity.
The intellectual conditioning began in earnest under Muhammadu Buhari. Government increasingly spoke of affordable petrol as an economic pathology. By 2020, his administration was arguing that market-determined petrol prices were unavoidable, that cheaper Nigerian petrol encouraged smuggling and that subsidy was unsustainable. The language gradually migrated from government officials into elite public discourse.
Tinubu has elevated this attitude into a governing creed. He announced on May 29, 2023, that “subsidy is gone.” Two years later, he said his economic reforms were “working” and described subsidy removal as necessary to rescue Nigeria from fiscal collapse. His government continues to present the pain generated by the World Bank-dictated “reforms” as a difficult passage toward eventual prosperity that we all know will never come.
Meanwhile, the very premise on which Nigerians have been asked to suffer is coming under increasingly serious scrutiny.
On our September Diaspora Dialogues podcast, oil producer and oil-and-gas businessman Gbenga Olawepo-Hashim broke down the pricing chain and arrived at an unsubsidized pump price of roughly ₦605 per liter. His central argument is devastatingly simple. Nigeria should dedicate crude for domestic refining and price that crude for the Nigerian economy rather than pretend that every barrel consumed in Nigeria has first been exported to Rotterdam and bought back at international opportunity cost.
He included production, refining, distribution and reasonable profit margins in his calculation. The conversation consequently moved from the tired incantation of “subsidy or no subsidy” toward the more useful question of what petrol should actually cost in an oil-producing country.
Professor Izielen Agbon, a U.S.-based petroleum engineer, approached the problem separately at a seminar organized by Femi Falana and reached a remarkably similar range. Using production-cost pricing and accounting for crude production, refining, transportation, margins and Nigeria’s tax regime, he calculated a pump price of roughly ₦435 to ₦687 per liter.
Agbon argues that Nigeria’s central pricing problem is import-parity pricing, which treats domestically produced crude as though its economic value to Nigerians must always equal what it could fetch abroad. He argues that this abandons Nigeria’s comparative advantage as an oil producer and transmits international prices directly into an impoverished domestic economy.
In light of Olawepo-Hashim’s ₦605 calculation or Agbon’s ₦435-₦687 range, government and defenders of the present system now owe Nigerians something better than slogans. Show us the numbers. Demonstrate why petrol produced from Nigerian crude for Nigerians must cost ₦1,400 per liter.
The old argument that affordability necessarily means an unsustainable subsidy is no longer sufficient.
There is an additional irony. NNPCL’s own 2024 audited accounts contain trillions of naira in “under-recovery” and energy-security obligations even after the government announced that subsidy had vanished. Agbon cites ₦8.67 trillion in under-recovery. The accounting terminology has changed, bu the underlying questions have not.
And where is organized labor in all this? To be fair, the NLC and TUC have condemned the latest increases. On September 30, the NLC demanded an immediate petrol-price reduction and described Nigeria as facing a “full-scale survival crisis.”
But statements are not commensurate with the scale of the emergency. If a ₦70,000 minimum wage buys barely 50 liters of petrol and every fuel increase ricochets through food, transportation and household survival, at what point does organized labor organize?
Governments from Washington to Berlin, Ottawa to Canberra and Seoul to Brasília understand that citizens cannot simply be abandoned to whatever price the global oil market produces. Nigeria should not require a special theory of economics to arrive at the same humane conclusion.
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