Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.

Fuel in Nigeria is cheaper than in other West African countries, mainly because of low taxes, according to the Major Energies Marketers Association of Nigeria (MEMAN).

This was explained by MEMAN’s Executive Secretary, Clement Isong, in an interview.

Isong supported a recent statement by Dangote Group’s President, Aliko Dangote, who said Nigerians pay about 55% of what people in other West African nations pay for petrol.

According to Punch, Isong added that in some cases, people in nearby countries pay 50% more than Nigerians. He said one big reason for this is that fuel taxes in Nigeria are much lower.

In Nigeria, the total tax on fuel is just 1% split between 0.5% for infrastructure funding and 0.5% for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Isong said:

“The taxation is lower in Nigeria. The taxation on fuel consumption in other countries is higher. The only taxation in Nigeria, I would say, is one per cent. 0.5 per cent for infrastructure funds, and 0.5 per cent for NPDRA. In other countries, the taxation is much higher.”

Isong said another factor is that Nigeria enjoys what economists call "economies of scale." Because Nigeria has a large population and high fuel consumption, petrol sells faster and in larger volumes.

This leads to lower costs per unit compared to countries where demand is lower and products stay unsold for longer periods.

Isong also confirmed that the Dangote Refinery has played a major role in keeping fuel prices low in Nigeria.

Isong said:

“Well, it is true also that for the last one or two months, he is the price leader, the person who has kept prices in Nigeria low. He is correct.”

During a recent visit by ECOWAS Commission President Dr. Omar Touray to the Dangote refinery, Aliko Dangote said that most Nigerians don’t know they are paying far less for petrol than neighbouring countries.

He mentioned that petrol from his refinery sells for about N815 to N820 per litre, while in other West African countries, the same product sells for about $1 per litre (roughly N1,600).

Dangote said his refinery has also helped bring down prices for other products, like diesel, which dropped from N1,700 to N1,100 per litre.

He added that these reductions have had a positive impact across many sectors of Nigeria’s economy, including agriculture, mining, and industry.

However, some fuel marketers and importers are not happy. They say that the steady drop in prices caused by Dangote’s refinery has led to big financial losses for their businesses, costing them billions of naira.

Meanwhile, Legit.ng earlier reported that the average retail price of petrol surged by 76.73% year-on-year to N1,239.33 in April 2025, despite a slight 1.77% dip from March’s N1,261.65.

According to the National Bureau of Statistics (NBS), prices vary significantly by state, with Imo, Jigawa, and Sokoto recording the highest average prices, while Yobe had the lowest.

Regional disparities persist, with the South East experiencing the highest average petrol prices and the South West the lowest, highlighting ongoing volatility in fuel pricing despite recent price moderation efforts.

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Source: Legit.ng