The National Institute for Policy and Strategic Studies (NIPSS) has predicted that petrol prices in Nigeria could drop to as low as ₦750 per litre before the end of 2025. This follows increased local refining capacity with the operations of Dangote Refinery and other refineries.
Current Petrol Prices and Expectations
Since the removal of fuel subsidies, petrol prices have risen significantly, reaching around ₦930 per litre. However, NIPSS Director-General Ayo Omotayo said on Tuesday that Nigerians should expect relief as local refineries ramp up production.
“With the removal of the subsidy, we now have Dangote Refinery and other refineries operating. The Port Harcourt refinery has been running continuously for over 110 days. These are short-term improvements,” Omotayo said on Channels Television’s The Morning Brief.
He added that fuel prices should decline naturally as more refining capacity becomes available. “We expect petrol prices to fall to about ₦750 per litre by the end of the year. The exchange rate should also improve, and in the long run, Nigeria will become a net exporter of refined products.”
Why Fuel Subsidies Were Removed
The Nigerian government ended the fuel subsidy system to reduce financial pressure on public funds. For years, the government swapped crude oil for imported petrol and subsidised its price, but this led to massive losses in revenue and foreign exchange reserves.
President Bola Tinubu announced the end of fuel subsidies during his inauguration in 2023, stating, “The fuel subsidy is gone.”
While the subsidy removal led to an immediate price increase, Omotayo believes it was necessary to prevent an economic collapse. “Nigeria was on the verge of financial ruin due to subsidies. We were not just subsidising our fuel but also fuel in neighbouring countries like Burkina Faso and Sierra Leone. Tough decisions were needed, and we commend the government for taking this step.”
Future Outlook
NIPSS advises Nigerians to be patient, as the economic benefits of subsidy removal will become more visible in the long term. The institute expects local refining to stabilise fuel prices and reduce dependence on imports, ultimately leading to lower costs for consumers.