Falling global crude prices are not automatically translating into cheaper fuel at Nigeria’s petrol pumps, an energy economist has warned, as consumers step up pressure for retail prices to mirror the recent decline in international benchmarks. Wumi Iledare, a Professor Emeritus of Petroleum Economics and a widely cited energy specialist, said the expectation that lower costs for crude should quickly reduce the prices of refined products is understandable—but the pricing link between crude and retail fuel is neither immediate nor straightforward.
Iledare made the remarks on Friday as Nigerians demanded a sharper drop in petrol prices after crude oil retreated to levels seen before the Middle East crisis. He pointed to the recent movement in global benchmarks, noting that West Texas Intermediate and Brent both slid to $69.34 and $72.56 per barrel, respectively, at roughly the same pace before the escalation of the Iran–United States–Israel conflict on February 28, 2026. With crude returning toward pre-crisis territory, public calls have grown for fuel to fall to about N900 per litre, a figure seen as the pre-crisis rate.
At present, retail fuel prices in Abuja are reported to range between N1,241 and N1,305 per litre even after the petrol reduction. In the past two weeks, Dangote Refinery cut its gantry petrol price by N125 to N1,125 per litre, with the latest adjustment announced on Thursday. Despite those changes, Nigerians have continued to push for additional reductions that would align more closely with the size of the decline in crude.
The debate has also gained attention internationally. Two days earlier, United States President Donald Trump directed his officials to examine why gasoline prices remain high even as crude prices have fallen. In Nigeria’s case, Iledare argued that the mechanics of pricing at the pump often follow a pattern known as asymmetric price transmission—where price increases typically appear faster than price decreases.
He explained that cost changes can show up differently at retail depending on how and when fuel was acquired. “In simple terms,” he said, “rises in costs usually reach consumers more quickly than reductions.” His analogy was that cost-driven price hikes behave like an elevator, moving upward rapidly, while price cuts tend to come down like a staircase, in steps rather than instantly. The reason, he said, is that many refined products sold at the pump may already have been purchased and stocked or shipped at earlier, higher prices. If prices were cut immediately before existing inventories are cleared, marketers could face major losses, which in turn could threaten supply continuity.
Beyond inventory timing, Iledare singled out the exchange rate as a major factor shaping Nigerian fuel pricing. Since petroleum products and many of the inputs used to produce them are effectively priced in U.S. dollars, any depreciation of the naira can offset the benefit of lower crude values. As a result, he argued, a drop in international crude prices does not automatically produce a corresponding reduction in domestic pump prices.
He also urged a clearer separation between crude oil prices and refined product prices. While the markets are connected, they do not move in perfect lockstep. Refining margins, global demand for products, seasonal consumption patterns, and supply disruptions can all influence the prices of petrol, diesel, and aviation fuel independently of crude oil. In other words, even if crude falls, the cost of turning crude into saleable products—and the demand conditions for those products—may not improve in the same way or at the same speed.
Iledare linked his explanation to Nigeria’s policy direction under the Petroleum Industry Act (PIA), which, he said, is built around deregulation and the principle that market forces—not administrative orders—should determine petroleum product pricing. Under that approach, when underlying market conditions genuinely support lower prices, competition among suppliers and marketers should help pass those benefits to consumers. He said there are already signs of downward movement in Nigeria in recent months as international market conditions improved, but the present argument should focus on whether price declines are consistent with real market fundamentals rather than on the simple fact that crude has fallen.
For him, the key issue is sustainability. Premature or artificial price cuts could trigger supply problems or weaken investor confidence in the downstream sector. While Nigerians deserve affordable energy, he said achieving that goal requires more than a temporary improvement in global crude prices. It also depends on exchange-rate stability, higher domestic refining capacity, efficient logistics, competitive market conditions, and policy consistency—factors that can deliver more durable relief to consumers.
