Decades of a subsidised pump price
Nigeria began subsidising petrol prices in the 1970s, in the years following the 1973 oil price shock, when governments started selling Premium Motor Spirit (PMS) — the technical name for what Nigerians call petrol — to consumers below its actual import or production cost, with the difference absorbed by the federal treasury or the state oil company S2. The practice was formalised under General Olusegun Obasanjo's military government through the Price Control Act of 1977, which made it illegal to sell regulated products, including petrol, above a government-set ceiling, and successive military and civilian administrations largely maintained some version of this arrangement for the next four and a half decades, adjusting the subsidised price only intermittently and usually amid public protest S2. Nigeria's Extractive Industries Transparency Initiative (NEITI), the federal body responsible for auditing the oil and gas sector, has calculated that the country spent a cumulative ₦15.57 trillion on petrol subsidies between 2006 and 2023 alone, a figure NEITI has cited in recommending options for policy review given the scheme's fiscal cost and its documented vulnerability to corruption and diversion S2. Because Nigeria imports the great majority of the refined petroleum products it consumes — despite being a major crude oil producer, as described in oil gas industry — the subsidy bill also moved with global oil prices and the naira's exchange rate, since a weaker naira or higher international product prices widened the gap the government had to cover at the pump S2
The 2023 removal
President Bola Tinubu ended the fuel subsidy in the first minutes of his presidency, declaring in his 29 May 2023 inauguration address that "subsidy is gone," a line that immediately became the defining phrase of his administration's opening economic reforms S1. The state oil company, NNPC Limited, adjusted pump prices within days, and the retail price of petrol rose from around ₦198–238 per litre under the old regulated regime to as much as ₦500–617 per litre within weeks — close to a tripling — as NNPC began pricing petrol closer to its actual landed cost rather than a government-set ceiling S1. The removal was timed to coincide with the change of administration, and NNPC subsequently disclosed that the government had been carrying billions of dollars in unpaid subsidy-related obligations, a debt overhang the new government cited as a central reason the subsidy could not be sustained S1. Organised labour reacted immediately: the Nigeria Labour Congress and Trade Union Congress, representing millions of Nigerian workers, began a nationwide strike on 2 August 2023, arguing the government had "no thought-out plan to cushion the effects on workers" and that transport, food and other costs had risen sharply for ordinary households as a direct result of the policy S5. The strike involved marches in Abuja, Kano, Kaduna and Bayelsa, and the government responded with a partial relief package — reported at around ₦500 billion, covering transit funding and agricultural support — while further rounds of union action and negotiation continued intermittently over the following months S5
How the NBS tracks the pump price today
Since the subsidy's removal exposed Nigerian consumers directly to market-driven pump-price movements, the National Bureau of Statistics' Petrol (PMS) Price Watch has become the standard reference for what Nigerians are actually paying at the pump, distinct from any price NNPC or private marketers formally announce. The NBS collects its data monthly from sample fuel retail outlets across all 774 local government areas in Nigeria's 36 states and the Federal Capital Territory, drawing responses from more than 10,000 outlets and households and deploying upward of 700 field staff, with average price estimates weighted according to household fuel-expenditure patterns rather than simply averaging posted pump prices S3. The published report breaks results down by state and by the six geopolitical zones, allowing comparison of, for example, the North-East (typically among the highest-priced zones, reflecting distribution distance and logistics costs) against the South-West (typically among the lowest, reflecting proximity to import and refining infrastructure) S3S4. In November 2025, the NBS reported an average national pump price of ₦1,061.35 per litre, down 12.6% from ₦1,214.17 a year earlier, with Borno, Sokoto and Kogi recording the highest state-level averages and Oyo, Nasarawa and Lagos the lowest — a spread the NBS and analysts attribute to fuel supply logistics, exchange-rate movements and distribution costs, all of which continue to affect price levels even without a subsidy holding the headline price artificially low S4
The deregulation debate
Removing the subsidy was only the first step toward what economists and policymakers describe as full downstream deregulation — letting market forces, rather than any government-set benchmark, determine the pump price entirely, including for the crude oil that domestic refiners buy to make fuel in the first place. The entry of the 650,000-barrel-per-day Dangote Petroleum Refinery into fuel production from 2024 sharpened this debate: the refinery buys much of its crude on international markets in dollars, but was expected, under a federal "naira-for-crude" initiative launched on 1 October 2024, to receive part of its feedstock from NNPC in naira to stabilise domestic fuel pricing S6. When NNPC did not consistently meet that crude-supply obligation — even after raising its allocation from five to seven monthly cargoes by mid-2026 — the refinery announced on 13 July 2026 that it would price wholesale fuel sold to marketers in US dollars rather than naira, arguing it could no longer absorb currency-mismatch losses while its own costs remained dollar-denominated S6. Nigerian academics have taken opposing positions on the legality and fairness of that move: Professor Dayo Ayoade has argued domestic sales should remain naira-denominated given the government support the refinery received during construction, while Professor Wumi Iledare has defended dollar pricing as legitimate risk management consistent with practice already established in Nigeria's oil, gas and aviation sectors S6. The dispute, still unresolved as of mid-2026, illustrates the underlying tension in Nigeria's fuel-pricing debate: a fully deregulated, market-priced downstream sector removes the fiscal burden and distortions of subsidy, but leaves consumer pump prices directly exposed to the same naira exchange-rate swings described in naira exchange rate, a trade-off the Tinubu government, NNPC, domestic refiners and organised labour continue to negotiate in public S6