An economist and former Special Adviser to the President of the African Development Bank on industrialisation, Banji Oyelaran-Oyeyinka, has explained why petrol priced at around N1,300 per litre remains unaffordable for many Nigerians, particularly those earning the N70,000 minimum wage.
In a statement released on Saturday, Oyelaran-Oyeyinka cautioned against comparing fuel prices using direct naira to dollar conversions, describing the method as misleading.
“When you do a direct conversion of this naira to dollars/pounds, you generate an economic fallacy; it confuses and misleads folks,” he said.
He noted that Nigeria’s economic realities, including low income levels, rising inflation and weak purchasing power, mean that petrol remains expensive for most citizens regardless of its nominal price.
According to him, fuel pricing should not be assessed in isolation, as it is closely tied to broader economic conditions and income levels.
“The price per liter in Nigeria of N1,300… is just one variable in a complex set of development equations,” he stated, adding that many Nigerians operate at subsistence levels where fuel becomes a luxury.
Oyelaran-Oyeyinka emphasized that purchasing power parity offers a more accurate measure of affordability than simple currency comparisons.
“Purchasing power parity is made clearer not by direct currency conversion, but by how long a worker must labor to earn a given sum,” he explained.
He added, “Low nominal petrol prices in Nigeria do not translate to affordability.”
Recent data indicates that petrol prices have risen by over 50 percent in recent weeks, climbing to between N1,361 and N1,380 per litre in Abuja from earlier levels of about N875 to N900.
The increase followed successive price adjustments by Dangote Refinery, which raised its gantry price to approximately N1,200 per litre in March.
