As Nigeria grapples with fuel supply challenges, economic fluctuations, and policy shifts, the outlook for fuel prices in 2025 indicates significant regional disparities. While official data for 2025 is still pending, ongoing structural issues and recent trends provide a solid foundation for projecting the most expensive states for petrol. This article examines the states facing the highest fuel costs and analyzes the key factors driving price hikes.
Factors Contributing to High Fuel Prices Across Nigeria
Lagos
As Nigeria’s commercial hub, Lagos experiences high fuel demand. Although the state is geographically close to import terminals, congestion, bureaucratic delays at ports, and state-imposed levies contribute to elevated fuel prices. The city’s dependence on road transportation exacerbates these issues, pushing retail prices up.
Abuja (FCT)
The Federal Capital Territory faces high living costs, coupled with bureaucratic hurdles in fuel distribution. Logistics challenges, including delays in transportation from southern depots, lead to occasional artificial scarcities and price volatility. The combination of these issues drives up fuel prices in Abuja compared to other regions.
Kano
Located in Nigeria’s northern region, Kano faces significant transportation costs due to its distance from the southern refineries. Security concerns along vital transportation routes, such as the Kaduna-Abuja highway, further disrupt fuel supply chains, inflating prices in the region. Additionally, a lack of local refineries means Kano is heavily reliant on imports, which increases vulnerability to price fluctuations.
Sokoto
Sokoto, located in the far north, faces compounded fuel distribution challenges due to its remote location from coastal depots. Cross-border smuggling to neighboring countries like Niger and Benin adds to supply constraints, contributing to higher fuel prices. Poor road infrastructure further raises transportation costs, leading to a significant premium on fuel in Sokoto.
Borno
Ongoing insurgency in Borno significantly disrupts fuel distribution, as security challenges hinder the delivery of petroleum products. This has led to increased reliance on black-market sources for fuel, driving prices to unsustainable levels. Insecurity in the region further exacerbates supply shortages and pricing instability.
Benue
Benue’s fuel prices are inflated by frequent tanker accidents on deteriorating roads, which delay shipments. Additionally, illegal fuel diversion to neighboring countries exacerbates local shortages, pushing prices higher. The state’s reliance on external sources for fuel and logistical difficulties contribute to its position among the top states with the highest fuel costs.
Plateau
Plateau faces higher fuel prices due to periodic ethnic and religious tensions, which are sometimes exploited by middlemen to create artificial scarcities. High interstate taxes and transportation inefficiencies, including the long distances to depots in the south, further elevate the cost of fuel in the region.
Bayelsa
Despite being rich in oil resources, Bayelsa struggles with fuel supply disruptions due to pipeline vandalism and militancy in the Niger Delta. Limited refining capacity in the state forces Bayelsa to rely on imported fuel, which can lead to price hikes. The combination of these challenges makes Bayelsa one of the more expensive states for fuel.
Adamawa
Adamawa faces the double challenge of cross-border smuggling to neighboring countries and inadequate road infrastructure. These factors increase transportation costs, contributing to high retail fuel prices. Limited access to large fuel depots also exacerbates the situation.
Kebbi
Kebbi’s fuel prices are influenced by seasonal dependence on river transport and ongoing smuggling activities. These factors, along with poor transportation infrastructure, result in inflated prices. Local fuel shortages are often exacerbated during the rainy season, leading to higher costs for consumers.
Key Factors Influencing Fuel Prices in Nigeria
Several structural factors continue to impact fuel pricing across the country. These factors, both regional and national, are crucial to understanding the price variations in different states:
Refinery Performance
Nigeria’s underperforming state-owned refineries continue to drive the country’s reliance on imported refined petrol. The status of the Dangote Refinery is particularly crucial. Delays in its stabilization could prolong Nigeria’s dependency on imports, leaving the country vulnerable to global oil price fluctuations.
Exchange Rate Volatility
The depreciation of the naira against the dollar significantly increases the cost of importing refined petrol. Central Bank policies aimed at stabilizing the currency have a direct impact on pump prices, especially when the naira weakens.
Transportation and Logistics
Fuel distribution is heavily impacted by rising diesel prices, which are used by tanker trucks for transport. Arbitrary interstate taxes and other logistical bottlenecks further inflate the cost of fuel distribution. These challenges are particularly evident in northern Nigeria, where transportation from southern depots is often costly and inefficient.
Insecurity
Ongoing security challenges, including banditry, insurgency, and pipeline vandalism, disrupt fuel supply chains across the country. These disruptions often lead to regional shortages, driving up fuel prices in areas heavily impacted by insecurity.
Government Subsidy Policies
The federal government’s stance on fuel subsidies has a significant influence on petrol prices. The phased removal of subsidies, which began in 2024, has already caused fuel prices to rise. Future changes in subsidy policies will continue to affect pricing across Nigeria.
Mitigation Prospects
Several initiatives could help stabilize fuel prices and mitigate regional disparities:
Dangote Refinery
The Dangote Refinery is poised to meet a significant portion of Nigeria’s fuel demand. If it becomes operational without delays, it could reduce Nigeria’s reliance on fuel imports and help stabilize prices. However, this will depend on overcoming operational challenges and increasing local refining capacity.
Rehabilitation of State-Owned Refineries
Reviving refineries such as the Port Harcourt Refinery would increase domestic fuel production and reduce dependence on imports. This would help alleviate the pressure caused by import price fluctuations.
Anti-Smuggling Measures
Enhanced border surveillance and more stringent anti-smuggling policies could help curb cross-border fuel smuggling, particularly in northern and border states. This would help stabilize local prices and reduce price disparities across regions. The fuel price disparities in Nigeria are influenced by a combination of regional factors, infrastructural challenges, and national policies. As the country continues to navigate these issues, stakeholders including the Nigerian National Petroleum Company (NNPC) and the Petroleum Products Pricing Regulatory Agency (PPPRA) must prioritize reforms in supply chains, refinery capacity, and transportation to mitigate the impact of these price hikes.
