By Steve Otaloro
The recent increase in the pump price of petrol has once again triggered intense debate across Nigeria. As expected, many citizens frustrated by the rising cost of living have directed their anger at President Bola Ahmed Tinubu. While Nigerians have every right to express concern over economic hardship, it is equally important that public discourse is guided by facts, economics, and a proper understanding of how the global oil market operates.
The first reality many critics ignore is that crude oil is not a local commodity. It is an international commodity traded on a global market and priced according to global benchmarks. Whether the crude is produced in Nigeria, Saudi Arabia, the United States, Canada, or Brazil, its value is largely determined by international supply and demand dynamics.
This means that events occurring thousands of miles away from Nigeria can immediately affect the price Nigerians pay at the pump. Wars, geopolitical tensions, sanctions, disruptions to shipping routes, OPEC production decisions, and global demand fluctuations all influence oil prices. The ongoing tensions involving Iran and the wider Middle East have already pushed global crude prices upward because traders anticipate supply disruptions through critical routes such as the Strait of Hormuz, through which a significant portion of the world’s oil supply passes.
As one analyst correctly noted, crude oil is sold at international benchmark prices regardless of whether it is produced locally or not. The same global forces that affect fuel prices in Nigeria also affect fuel prices in the United States, Canada, Europe, and Asia.
Indeed, citizens in oil-producing countries such as the United States and Canada have also witnessed increases in fuel prices during periods of global energy instability. Several commentators living in North America have recently confirmed paying substantially more for fuel than they did before the latest energy crisis. This demonstrates that oil-producing nations are not immune from international market realities.
Critics often ask: “If Nigeria produces crude oil, why can’t petrol simply be sold cheaply?” While the question appears logical on the surface, it ignores a crucial economic fact. The machinery, equipment, spare parts, technology, logistics services, and financing required for oil production are themselves priced internationally. Therefore, forcing producers to sell far below market value can eventually undermine investment and sustainability within the industry.
This was precisely the problem associated with the old subsidy regime.
For decades, Nigeria spent trillions of naira subsidizing petrol consumption. The policy was politically popular but economically destructive. Rather than investing oil revenues into roads, railways, hospitals, schools, electricity infrastructure, and social development, enormous amounts of public funds were consumed subsidizing fuel, often amid allegations of corruption and inefficiency.
President Tinubu’s removal of fuel subsidy was undoubtedly painful. However, many economists had advocated for the removal long before he became President. Previous administrations repeatedly acknowledged that the subsidy system had become financially unsustainable.
Yet, while critics focus almost exclusively on subsidy removal, they often overlook what may become one of the most transformational developments in Nigeria’s energy history: the successful emergence of the Dangote Refinery.
The Dangote Refinery is not merely another industrial project. It is Africa’s largest refinery and one of the largest single-train refineries in the world. The refinery has already achieved processing levels above 700,000 barrels per day during performance testing and is increasingly supplying refined products both within Nigeria and across Africa. The facility is reshaping energy trade patterns across the continent.
Although the refinery is a private-sector investment by Aliko Dangote, the Tinubu administration deserves recognition for policy decisions that have supported its operation and growth.
One of the most significant interventions was the approval of the crude-for-naira initiative. Under this arrangement, local refineries, including Dangote Refinery, can purchase crude oil using naira rather than dollars. The Federal Executive Council approved the policy and implementation began in 2024. The objective was clear: reduce pressure on foreign exchange demand, strengthen the naira, support domestic refining, and improve energy security.
The policy represented a major shift from previous arrangements where local refiners had to source dollars to buy Nigerian crude. Government officials projected that the initiative could significantly reduce pressure on Nigeria’s foreign exchange market while supporting domestic refining capacity.
The administration subsequently moved to sustain and extend the initiative, emphasizing that crude sales in naira were not intended as a temporary measure but as a strategic policy aimed at promoting local refining and reducing dependence on foreign exchange.
It is therefore inaccurate to portray the Tinubu administration as hostile to local refining. On the contrary, some of the most consequential policy support ever granted to domestic refiners has occurred under the current administration.
This does not mean Nigerians should stop demanding better governance. Far from it.
Many critics raise legitimate concerns regarding transportation, electricity, water supply, healthcare, and social welfare. They argue that even if fuel prices reflect global realities, Nigerians still face greater hardship because they must personally provide services that governments in many advanced countries deliver more efficiently. This concern deserves serious consideration.
A worker in Chicago, London, or Toronto may pay international fuel prices, but that worker often benefits from reliable public transportation, stable electricity, potable water, and stronger social infrastructure. Nigerians understandably ask why similar support systems remain inadequate despite the country’s oil wealth.
These are valid questions.
However, acknowledging these shortcomings should not require distorting economic realities. The fact that Nigeria needs better infrastructure does not change the fact that crude oil is globally priced. The fact that citizens face hardship does not mean every increase in fuel prices originates from Aso Rock.
Unfortunately, politics often clouds objective analysis. For some observers, every rise in petrol prices automatically becomes proof of presidential failure, while every global development affecting oil markets is ignored. Such reasoning oversimplifies a highly complex industry.
The truth lies somewhere between blind criticism and blind praise.
President Tinubu did not create the global oil market. He did not create the Middle East conflict. He did not create international crude benchmarks. He did not create decades of underinvestment in domestic refining.
What his administration has done is remove a costly subsidy regime, support domestic refining through the crude-for-naira initiative, encourage local refining capacity, and help create conditions under which the Dangote Refinery is becoming a continental energy powerhouse.
Reasonable people may disagree on aspects of implementation. They may argue for stronger welfare programmes, transportation support, tax reliefs, or additional interventions to cushion citizens. Those are legitimate policy debates.
But one thing remains clear: reducing the entire fuel price conversation to “Tinubu caused fuel prices to rise” ignores the realities of global energy economics.
Nigeria’s challenge today is not merely the price of petrol. It is how to convert oil wealth into lasting infrastructure, energy security, industrial growth, and economic opportunity.
That is the debate Nigerians should be having. While criticism remains an essential part of democracy, fairness demands that we acknowledge the difference between global economic realities and domestic policy choices. President Bola Ahmed Tinubu did not create the international oil market, but his administration is taking decisive steps to ensure that Nigeria benefits more from its oil resources through local refining, energy security, infrastructure development, and economic reforms. The task before the nation is not to politicize every increase in fuel prices, but to support policies that will ultimately make Nigeria less vulnerable to external shocks and more prosperous for future generations.
About the author
Steve Otaloro is a Nigerian public affairs analyst, political commentator, and development advocate with a keen interest in governance, economics, energy policy, and nation-building. He is known for his incisive analyses of contemporary issues and his commitment to fostering informed public conversations rooted in facts, data, and strategic thinking. Through his writings, he seeks to contribute to a deeper understanding of the policies, opportunities, and challenges shaping Nigeria’s future.
