Eshioromeh Sebastian in Abuja
The Federal Government has firmly ruled out any plan to revert to petrol price controls, even as escalating tensions in the Middle East send shockwaves through global oil markets.
According to the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, market forces will continue to determine the price of petroleum products, with government intervention only conceivable as an absolute last resort.
Edun made this position clear during an interview on Politics Today on Channels Television on Wednesday, where he addressed growing concerns about the potential impact of the Middle East conflict on Nigeria’s fuel prices and overall economy.
Edun emphasised that the administration of President Bola Ahmed Tinubu remains fully committed to the market-based policies it introduced upon taking office.
He stressed that allowing petrol prices to be determined by market forces was a key reform designed to correct long-standing distortions in the Nigerian economy, and reversing course is not on the table.
“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 stated.
He described the current pricing mechanism as fundamental to the President’s economic philosophy. “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.
Intervention a “Last Resort”
While acknowledging that the ongoing crisis in the Middle East could still disrupt global oil supplies and affect Nigeria, the minister was unequivocal that fixing prices is not the government’s preferred response. Instead, the administration would deploy targeted policy measures to cushion the impact on citizens.
When pressed on whether the government could step in if petrol prices rise sharply, Edun said 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 explained.
CNG Expansion as the Alternative
Rather than price controls, the government is banking on its compressed natural gas (CNG) programme to lower transportation costs for Nigerians. Edun revealed that the President has approved additional support to accelerate the conversion of vehicles from petrol to CNG, which offers a significantly cheaper alternative.
“One of the ways the President immediately announced was 100,000 extra CNG conversion kits to enable vehicles convert to CNG fuel, which is maybe 25 to 30 per cent of the cost of petrol,” Edun said.
He reiterated that the government would continue to explore every avenue to reduce the cost of living without interfering with market fundamentals.
Local Refineries: A Shield Against Global Shocks
A major reason for the government’s confidence in holding its position, Edun explained, is Nigeria’s growing domestic refining capacity. He noted that the country now consumes approximately 50 million litres of petrol daily, a demand that local refineries are now capable of meeting.
“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,” the minister said.
He specifically cited the Dangote Refinery, alongside other emerging refining projects across the country, as key assets contributing to this newfound resilience. This domestic capacity, he argued, helps insulate Nigeria from the kind of severe fuel shortages affecting other nations amid global supply disruptions.
“At this time the resilience that the Nigerian economy has is coming largely from the fact that we do have that investment in refining,” Edun noted.
Global Risks Remain
Despite this relative strength, Edun admitted that international developments could still impact Nigeria through secondary channels. These include higher freight charges, disruptions in global supply chains, and increased production costs, all of which could filter through to the broader economy.
“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 warned.
He also pointed to the risk of continued global inflation, which could lead to higher interest rates worldwide and increase borrowing costs for countries like Nigeria.
Broader Economic Context
Edun used the opportunity to highlight the progress made under the current administration’s reform agenda. He noted improvements in exchange rate stability, a build-up in external reserves, slowing inflation, and stronger economic growth. According to him, the reforms—particularly the removal of the petrol subsidy and the unification of exchange rates—have helped stabilise the economy after years of structural challenges.
He also provided context on the nation’s fiscal situation, revealing that public debt stood at about N122 trillion when the government took over, including around N30 trillion in Ways and Means advances from the Central Bank of Nigeria that were later regularised to improve fiscal transparency. Exchange rate adjustments, he added, increased the naira value of the debt by approximately N47 trillion, raising the burden of debt servicing.
“We are coping with a huge debt service burden which was inherited,” the minister said.
Growth, Jobs, and Social Investment
On poverty reduction, Edun said the government is targeting sustained economic growth of at least seven per cent annually to create jobs and lift millions out of hardship. He noted that the economy has recently recorded growth of around four per cent, but the goal is to accelerate this pace.
He disclosed that the government’s social protection programme has already supported about 10 million households, representing roughly 50 million Nigerians, through direct cash transfers.
The government is also working to expand access to affordable financing for micro, small and medium enterprises, which account for about 85 per cent of private sector activity, in partnership with development organisations. Edun explained that new programmes are being developed to provide affordable loans to small businesses in order to boost productivity and create jobs.
Naira Stability Attracting Investment
Edun pointed to the stability of the naira as a sign of growing investor confidence. He noted that the currency’s performance—from about N1,900 to the dollar in November 2024 to around N1,400 now—signals that “the naira is now worth holding.” This, he said, encourages domestic savings and investment while making Nigeria more attractive to both local and foreign investors.
According to him, this trend encourages people to save and invest within the Nigerian economy while making the country more attractive to both domestic and foreign investors.
Looking Ahead
Looking forward, Edun said the government is focused on protecting recent economic gains and ensuring that food and living costs remain manageable for Nigerians, even as global developments continue to pose risks.
He added that the government is also encouraging domestic production to strengthen the country’s economic resilience in the face of global disruptions. Projects such as the National Single Window initiative are being introduced to improve Nigeria’s export competitiveness and make trade easier within regional markets such as the Economic Community of West African States and the African Continental Free Trade Area.
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