The Federal Government has reaffirmed its commitment to market-based petrol pricing, saying it will not introduce price controls despite rising geopolitical tensions in the Middle East that have heightened volatility in global oil markets.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, said this during an interview aired on Wednesday on Politics Today on Channels Television.
According to the minister, the administration would explore alternative ways to ease the cost-of-living pressure on Nigerians rather than reversing key market reforms.
What the minister said
- “Rather than now reverting back and taking a backward step, we will look at every other measure that can help the cost of living of Nigerians without resorting to non-market pricing,” Edun said.
He explained that the Tinubu administration’s economic strategy is anchored on market-driven pricing for petroleum products and foreign exchange, reforms introduced to eliminate distortions that had persisted for years.
- “It is the market price. That is what has been instilled by Mr President that was missing for so long, market pricing of petroleum products,” he added.
Edun said that although the conflict in the Middle East could influence global oil prices, the government would rely on targeted policy measures instead of intervening directly in fuel pricing.
Asked whether authorities might step in if petrol prices surge sharply, he maintained that intervention would only happen under extreme circumstances.
- “Normally, given the policies and philosophy of this government, it would always have to be a last resort,” he said.
Domestic refining boosts energy resilience
The minister pointed to Nigeria’s growing domestic refining capacity as a major buffer against external energy shocks, noting that local production could now meet the country’s fuel demand.
According to him, Nigeria consumes roughly 50 million litres of petrol daily, and domestic refiners, including the Dangote Refinery and other emerging facilities, have indicated their ability to supply that volume.
- “Our demand is about 50 million litres per day, and the refiners say they can meet that demand, so we are in a relatively strong position,” Edun said.
He added that investments in refining have strengthened Nigeria’s ability to manage global disruptions that have forced some countries to ration fuel supplies.
- “At this time, the resilience that the Nigerian economy has is coming largely from the fact that we do have that investment in refining,” he noted.
As part of measures to reduce transport costs, the government is also expanding its compressed natural gas initiative.
- “One of the ways the President immediately announced was 100,000 extra CNG conversion kits to enable vehicles to convert to CNG fuel, which is maybe 25 to 30% of the cost of petrol,” Edun said.
Despite the benefits of higher oil prices for revenue, the minister cautioned that geopolitical tensions also bring downside risks.
- “You have gains on one side from higher oil prices, but you also have costs on the other side, particularly freight and other supply chain disruptions,” he explained.
He also warned that persistent global inflationary pressures could push interest rates higher worldwide, raising borrowing costs for many economies, including Nigeria.
Reforms, debt pressures and growth targets
Edun said Nigeria’s economy has shown resilience despite external shocks, citing improvements in exchange rate stability, external reserves, inflation trends and economic growth.
He noted that reforms such as fuel subsidy removal and exchange rate unification helped stabilise macroeconomic conditions after what he described as challenging inherited economic conditions.
According to the minister, Nigeria’s public debt stood at about N122 trillion when the current administration assumed office, including about N30 trillion in Ways and Means advances that were later regularised.
He also explained that exchange rate adjustments added roughly N47 trillion to the naira value of the country’s debt stock, increasing the cost of servicing public obligations.
- “We are coping with a huge debt service burden which was inherited,” Edun said.
On poverty reduction, he said the administration is targeting faster economic expansion to lift more Nigerians out of hardship.
Nigeria’s economy is currently growing at about 4% annually, but the government aims to raise that figure to at least 7% to significantly reduce poverty levels.
He disclosed that social protection programmes have already reached about 10 million households, equivalent to roughly 50 million Nigerians, through direct payments.
The government is also prioritising support for micro, small and medium enterprises, which account for around 85% of private sector activity.
Edun said new financing initiatives are being developed with development partners to provide affordable funding for small businesses in order to boost productivity and job creation.
He added that recent macroeconomic reforms have created incentives for domestic investment by stabilising the currency.
- “If in November 2024 you bought dollars at 1,900 and you are now selling at 1,400, what that shows is that the naira is now worth holding,” he said.
According to the minister, the shift encourages savings and investment within the domestic economy while improving Nigeria’s attractiveness to both local and foreign investors.
Edun also said the government is strengthening domestic production and trade competitiveness through initiatives such as the National Single Window project, which is expected to simplify export processes and enhance trade integration across ECOWAS and the African Continental Free Trade Area.
While acknowledging that global developments could still affect the economy, he said the government’s focus remains on protecting recent gains and ensuring food prices remain affordable for Nigerians.
