Nigeria, Africa’s largest oil producer, has a complex relationship with its fuel pricing structure. Over the decades, successive Nigerian governments have adjusted fuel prices, often in response to global economic shifts, domestic fiscal policies, and subsidies. These changes have had a profound impact on the country’s economy and the daily lives of its citizens, who rely heavily on petrol for transportation and business activities.
This article presents a comprehensive review of the key moments in Nigeria’s fuel pricing history, from the 1970 to the 2024.
Early Beginnings: 1970s
The first significant fuel price hike occurred under General Yakubu Gowon in 1973, when the price of petrol increased from 6 kobo (k) to 8.45 k per liter, a 40.8% jump. This modest increase reflected the realities of rising global oil prices following the oil crisis of the early 1970s. However, it set the tone for future governments to adjust fuel prices as a means of revenue generation.
General Murtala Mohammed followed with a slight increase in 1976, raising the price from 8.45 k to 9 k, a 0.59% adjustment. It was a cautious move, as the military government sought to balance economic stability with minimal impact on the populace.
General Olusegun Obasanjo, who succeeded Murtala, made a more substantial adjustment on October 1, 1978, when the price rose from 9 k to 15.3 k, marking a 70% increase. This move reflected rising global oil prices and domestic financial needs as Nigeria worked to rebuild its economy post-civil war.
The 1980s: Economic Adjustments
The civilian government of President Shehu Shagari continued the upward trend on April 20, 1982, raising the fuel price from 15.3 k to 20 k—a 30.71% hike. Shagari’s government was dealing with the effects of a global oil glut, and higher prices became a way to address fiscal deficits.
Under General Ibrahim Babangida, Nigeria saw multiple fuel price increases, the first occurring on March 31, 1986, when prices surged from 20 k to 39.5 k, a 97.5% rise. This was part of his broader economic reform agenda, which included the controversial Structural Adjustment Program (SAP).
Babangida raised prices again on April 10, 1988, from 39.5 k to 42 k (a 6.33% increase), and later on January 1, 1989, when prices for private vehicles jumped from 42 k to 60 k. These price hikes culminated in a uniform price of 60 k per liter on December 19, 1989, reflecting a 42.86% increase.
Another increase came on March 6, 1991, when the price rose from 60 k to 70 k, a 16.67% adjustment. By this time, economic challenges had taken their toll on Nigeria, with inflation eroding the purchasing power of its citizens.
The Tumultuous 1990s: Political Instability and Price Shocks
Following Babangida, Ernest Shonekan, head of the Interim National Government, oversaw a dramatic fuel price increase on November 8, 1993, when prices skyrocketed from 70 k to ₦5.00—a staggering 614% increase. This dramatic jump was short-lived, as General Sani Abacha assumed power on November 22, 1993, and reduced the price to ₦3.25 (-35%).
However, Abacha reversed course again in October 1994, first raising the price from ₦3.25 to ₦15.00 (a 361.54% increase) on October 2, before dropping it slightly to ₦11.00 on October 4, reflecting a 26.67% reduction.
After Abacha’s regime, General Abdulsalami Abubakar made further adjustments, raising the fuel price from ₦11.00 to ₦25.00 on December 20, 1998—a 127.27% increase. Just weeks later, on January 6, 1999, he reduced it to ₦20.00, a 20% decrease.
The Obasanjo Years: 2000s Era of Frequent Adjustments
Returning to power as a civilian leader, Olusegun Obasanjo implemented several price changes during his administration. On June 1, 2000, fuel prices rose from ₦20.00 to ₦30.00 (a 50% increase), but were reduced to ₦22.00 a week later on June 8, a 10% drop.
By January 1, 2002, Obasanjo increased the price again, from ₦22.00 to ₦26.00 (18.18%), followed by a more significant hike in 2003 from ₦26.00 to ₦42.00 (61.54%). On May 29, 2004, the price rose further to ₦50.00 (19.05%), and on August 25, 2004, the price climbed to ₦65.00, a 30% increase.
In one of his final acts as president, Obasanjo increased the price to ₦75.00 on May 27, 2007, an additional 15.38% hike. However, his successor, Umaru Musa Yar’Adua, reversed this decision and reduced the price back to ₦65.00 in June 2007 (-15.38%).
The Jonathan Era: The Subsidy Debate
On January 1, 2012, President Goodluck Jonathan announced the partial removal of fuel subsidies, causing petrol prices to rise dramatically, fluctuating between ₦138.00 and ₦250.00, representing increases ranging from 41.44% to 81.16%. This sparked nationwide protests known as the “Occupy Nigeria” movement, forcing the government to partially reinstate the subsidy and lower the price to ₦97.00 per liter.
Buhari’s Era: Subsidy Policy and Fuel Price Hikes
During President Muhammadu Buhari’s tenure, fuel prices became a contentious issue as the government struggled with the rising cost of maintaining subsidies on petrol. The Nigerian government had long subsidised fuel to keep prices artificially low for consumers. However, this policy came at a great cost to national revenue, especially during periods of volatile crude oil prices and declining oil production due to insecurity in the Niger Delta.
In 2020, amid the global economic disruptions caused by the COVID-19 pandemic, Buhari’s government made a significant move by reducing fuel subsidies as part of broader economic reforms. The move saw petrol prices increase from around ₦145 to ₦165 per liter until mid-2022 (the government maintained a controversial fuel subsidy program to keep fuel prices low).
Tinubu’s Bold Move: Removal of Subsidy and the Aftermath
The landscape changed drastically when Bola Tinubu assumed office in May 2023. In his inaugural speech, Tinubu boldly announced the complete removal of fuel subsidies, which immediately caused fuel prices to skyrocket. Tinubu justified the removal of the subsidy by arguing that Nigeria could no longer afford to drain its limited resources on fuel subsidies while neglecting critical areas such as infrastructure, education, and healthcare. He emphasised the need for economic reforms to address the fiscal imbalance and foster sustainable growth. The new administration promised that savings from the subsidy removal would be redirected to development projects that would benefit all Nigerians in the long term.
In June 2023, the newly inaugurated President Tinubu announced the removal of this subsidy, which had long been criticized for being costly and inefficient. This decision led to an immediate increase in fuel prices, jumping to about ₦500 per liter — a 244.83% increase. By August 2023, prices further spiked to over ₦600 per liter in many areas, translating to an overall increase of more than 300% from Buhari’s era.
Consequently, the price of fuel continued to surge significantly. In September 2024, it reached ₦897 per liter, following a series of steady increases throughout the year. This marks a 50.1% hike from ₦598 per liter earlier in the year. The sharp rise in fuel prices is attributed to market dynamics, including the removal of fuel subsidies and the fluctuation of the exchange rate.
Fuel prices had been fluctuating throughout 2024, starting at ₦668.3 in January, then rising to ₦770.54 in July, and now hitting a high of ₦897. These increases have sparked widespread public and labour union protests, demanding government intervention to alleviate the burden on the populace.
What’s Next for Nigeria?
As the nation navigates the turbulent waters of subsidy removal under President Tinubu, the nation remains at a critical crossroads. The success of Tinubu’s economic reforms will depend on the government’s ability to effectively manage the transition, provide tangible benefits to citizens, and foster long-term economic growth. For now, Nigerians continue to feel the sting of rising fuel prices, but many hope that the painful reforms of today will pave the way for a more prosperous and stable tomorrow.
