Beyond N3,000: Why Okpebholo’s UK-Nigeria Fuel Comparison is Misleading 

The Governor of Edo State, Monday Okpebholo’s attempt to defend Nigeria’s petrol prices by comparing them with those in the United Kingdom may be numerically correct but economically misleading.

Okpebholo said Nigerians should consider themselves better off because petrol sells for more than N3,000 per litre in the UK, compared with roughly N1,400 in parts of Nigeria.

“When we complained about the cost of petrol, I was in London last week. I told my friend, let’s go and buy fuel just to know the cost of fuel between Nigeria and England,” the governor said. “After conversion, it’s about N3,000-something for one litre of fuel. We are doing very well here.”

The UK’s average petrol price had risen to about £1.74 per litre by September 24, equivalent to more than N3,000 at prevailing exchange rates. Nigeria’s latest NNPC pump-price list puts petrol at N1,385 per litre in Lagos and N1,430 in Abuja, although prices vary by location.

But converting a British price into naira does not provide a meaningful measure of affordability for Nigerians.

Price is not the same as affordability

A litre of petrol does not have the same economic weight for a Nigerian worker as it does for a British worker simply because its naira-equivalent price is higher or lower. The more relevant question is how much of a consumer’s income is required to purchase fuel.

A price comparison that stops at currency conversion therefore leaves out purchasing power, average earnings, transportation costs and the wider cost of living.

It is akin to comparing the price of bread in two countries without asking how many loaves an average worker can afford with a day’s income.

For an energy-sector discussion, the more important metric is energy affordability relative to income, not the nominal price after currency conversion. There is another uncomfortable problem with the comparison: Nigeria is one of the world’s major oil-producing countries.

The country has spent decades exporting crude oil while depending heavily on imported refined petroleum products. The situation is changing with the expansion of domestic refining, particularly the Dangote refinery, but Nigerians are still exposed to international crude prices and other market costs.

Indeed, recent developments demonstrate precisely why pump prices cannot be evaluated simply by comparing them with those in another country.

Reuters reported this week that petrol prices in Nigeria had climbed to around N1,400 per litre in Lagos and Abuja and as high as N1,500 in parts of northern Nigeria, amid a surge in international oil prices. The report noted that even with the Dangote refinery operating at full capacity, Nigeria remains vulnerable to global oil-market movements.

What the UK comparison leaves out

The UK is also not simply selling petrol at £1.74 per litre and calling it an economic success.

British motorists are currently experiencing a significant fuel-price shock of their own. Government-linked weekly data put average UK unleaded petrol at about 172 pence per litre on September 21, while diesel was about 195.5 pence.

Recent reports have linked the increase to disruptions in global energy markets and geopolitical tensions.

In other words, British consumers are also complaining about expensive fuel. Using Britain’s high pump price as evidence that Nigerians are “doing very well” therefore tells only one part of the story.

The real comparison should examine why prices are high in both markets, who bears the cost, how much consumers earn, how much governments tax or subsidise fuel, and how efficiently each country converts energy into economic value.

The subsidy question remains

Nigeria’s petrol subsidy removal fundamentally changed the country’s downstream petroleum market. The reform eliminated a major fiscal burden but also transferred much of the immediate price shock to households and businesses.

But describing consumers as “doing very well” simply because another country has a higher nominal pump price risks confusing market reform with consumer welfare. The two are not necessarily the same thing.

A government can pursue reforms that economists consider necessary for long-term fiscal sustainability while citizens simultaneously experience serious short-term pressure from higher energy costs.

The more consequential question for Nigeria’s energy sector is not whether petrol costs N1,400 or N3,000 in another country.

It is whether Nigeria can build an energy system in which its large hydrocarbon resources, expanding refining capacity and domestic market translate into more stable and affordable energy for households and businesses.

That means reducing exposure to external shocks, improving domestic refining and crude supply arrangements, strengthening petroleum-market transparency, expanding alternative transport fuels and electricity, and ensuring that energy-sector reforms ultimately improve productivity.

The Dangote refinery’s emergence has already altered the structure of Nigeria’s downstream market, but recent price movements show that domestic refining alone does not automatically insulate consumers from global oil-price volatility.

So, Governor Okpebholo is right about one narrow point: petrol is currently more expensive per litre in the UK when converted to naira. But that is where the comparison should end—not where the argument for Nigeria’s economic performance should begin.

For an oil-producing country of Nigeria’s size, the harder and more important question is not whether another country sells petrol for more.

It is whether Nigerians can afford the energy they need to work, move goods, run businesses and live with dignity and whether the country’s enormous energy resources are finally being converted into that outcome.