Nigerians have continued to bear the brunt of rising gasoline and diesel prices, despite calls from energy economists and industry stakeholders for targeted interventions to ease the strain on households and businesses as nations around the world adopt fuel subsidies and other palliative measures to lessen the impact of the US-Iran war and the closure of the Strait of Hormuz.
More than 115 nations have implemented energy conservation, price support, and structural policies targeted at lowering fuel usage in response to the energy shock, according to the International Energy Agency.
Of them, 30 had announced longer-term structural strategies to reduce fuel usage, 58 had adopted energy conservation measures, and 94 had implemented price-support measures, such as fuel subsidies, price controls, and tax interventions.
The actions were taken in response to the disruption of energy flows via the Strait of Hormuz, one of the most significant oil and gas shipping routes in the world, which sent shockwaves thru the world’s energy markets.
The impact has been felt by Nigeria in the form of higher petrol prices, which in some areas of the country have risen above N1,300 per liter before falling to N1,200. Additionally, the rise in energy expenses has increased the cost of transportation, food, and commercial operations.
Demand-side solutions, according to Jérôme Bilodeau, head of analysis for the IEA’s Office of Energy Efficiency and Inclusive Transitions, could lessen the impact of the disruption but not replace the massive amount of energy typically moved via the Strait of Hormuz.
During a webinar organized by the Center for Strategic and International Studies, Bilodeau stated, “Demand-side measures can dampen and moderate the impact, but they are not enough to replace the sheer size of energy that’s transiting thru that strait.”
He said that since the start of the war, 58 governments have implemented energy-saving measures, primarily aimed at reducing oil consumption thru the use of less fuel for private vehicles, working or studying from home, fewer government trips, and modifications to cooling temperature settings.
Speaking during a webinar covered by S&P Global Energy, Bilodeau claimed that 94 governments have also implemented pricing supports such taxes, price ceilings, and fuel subsidies.
He claimed that Vietnam had reduced tariffs on electric vehicles, India was pushing electric stoves, and South Korea and Japan had implemented price restrictions and fuel subsidies.
According to the IEA official, thirty governments have also announced structural programs, such as energy efficiency initiatives, plans for electrification, and subsidies for renewable energy, to lower fuel use over the long run.
However, industry associations and energy economists in Nigeria have demanded specific actions to protect consumers from the effects of the energy shock.
Prof. Adeola Adenikinju, a past president of the Nigerian Association of Energy Economics, asked the Federal Government to provide disadvantaged Nigerians with a portion of the extra money made from rising oil prices.
“Now is the moment for Nigeria to say, ‘Look, we are sending some cash to those poor people who are vulnerable,'” stated Adenikinju.
He emphasized that assistance should go beyond federal officials to Nigerians in the private and informal sectors, claiming that rising gas prices have exacerbated inflation and raised transportation costs.
The Nigerian Petroleum Products Retail Outlets Owners Association also called on the government to take action to lower transportation expenses and stop rising fuel prices from exacerbating food inflation.
Billy Gillis-Harry, the president of PETROAN, stated that Nigerians should receive a portion of the benefits from rising oil prices.
Additionally, the Independent Petroleum Marketers Association of Nigeria said that lowering taxes and fees on petroleum products would assist control pump prices.
Chinedu Ukadike, a spokesman for IPMAN, stated that costs levied by organizations such as the Nigerian Maritime Administration and Safety Agency, Nigerian Ports Authority, and Nigerian Midstream and Downstream Petroleum Regulatory Authority have to be examined.
“Some of these charges, particularly the NIMASA taxes and the others, should be reduced by the government. It will assist in lowering the cost of petroleum products, he stated.
Additionally, he advocated for accelerating the conversion of CNG vehicles and repairing petroleum pipelines to lower the cost of delivering petroleum products by road.
In a similar vein, the Lagos Chamber of Commerce and Industry called on the government to use the crisis to boost domestic refining and hasten the transition to alternate fuels.
Muda Yusuf, the director of the Center for the Promotion of Private Enterprise, urged more funding for mass transit and financial incentives for domestic refiners.
However, the Federal Government turned down the requests, leaving Nigerians to struggle with gas prices, which were N830 on average in February prior to the escalation of the Middle East crisis.
Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, declared at the height of the crisis that the government will continue to take a market-driven strategy, characterizing the elimination of subsidies as irreversible.
Oyedele stated, “We won’t implement price control because we believe in the market, and we won’t bring back the fuel subsidy because it creates distortions for the economy.”
Petrol sold for roughly N200 per liter prior to President Bola Tinubu’s termination of the subsidy in May 2023. When the President announced that “the fuel subsidy is gone” in his inaugural address, the price instantly surpassed N500.
After that, the price increased to over N1,200 per liter in 2024 before the Dangote Petroleum Refinery intervened to lower the price to an average of almost N800 per liter.
The Federal Government insisted that the reforms it had implemented in the petroleum industry would be undermined by going back to subsidies or enforcing price controls, despite demand from stakeholders.
According to Oyedele, the administration believed that market-based pricing was essential for luring investment and preserving macroeconomic stability. He emphasized, however, that in order to safeguard consumers, the government would keep regulating the downstream sector.
He stated, “There would be regulations in place to ensure fuel suppliers and marketers do not extort Nigerian consumers.”
The minister further contended that rather than merely exposing Nigeria to increased energy expenses, the geopolitical issue might provide the nation a chance. “As the world looks to diversify energy sources and invest in new markets, the situation in Iran presents new opportunities for us,” he stated.
According to Oyedele, Nigeria’s economy has grown significantly in terms of dollars, and the nation is still dedicated to achieving its goal of having a $1 trillion GDP by 2030.
Heat pump sales increased by 22% in France, 34% in Germany, and 20% in Poland in the first quarter of 2026 compared to the same period in 2025, according to the IEA, indicating that the worldwide response has extended beyond short-term fuel price interventions.
During that time, sales of electric cars reportedly rose by 65% in India, 150% in South Korea, and 80% in Southeast Asia. According to the agency, India limited the use of industrial gas, while Japan likewise implemented subsidies for natural gas and electricity.
The worldwide demand for liquids has decreased in tandem with the governmental measures. Global liquids demand decreased to 99.2 million barrels per day in May 2026 from 105.1 million bpd in May 2025, according to S&P Global Energy CERA’s August Short-Term Outlook.
