The high cost of petrol in oil producing countries result from a mix of market forces, policies, and economic factors.
- High cost of PMS in oil-producing countries is influenced by market forces, policies, and economic factors
- Richer countries generally have higher petrol prices, while poorer and oil-producing countries have lower prices
- Libya had the lowest petrol price in Africa and the 2nd lowest globally at $0.031 per litre
This high cost of petrol, or Premium Motor Spirit (PMS) can be attributed to several economic, political, and structural factors, which vary significantly from one country to another
Each country’s situation is unique, shaped by its governance, infrastructure, and approach to managing its resources.
According to the December 2024 Gasoline Price Report published by Global Petrol Prices, the global average price of petrol during the period was $1.24 per litre.
Disparity in global PMS prices
However, significant variations were observed across countries, primarily due to differences in taxes and levies.
The report also highlighted that these price disparities are driven by varying levels of taxes and subsidies applied to gasoline in different regions.
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“All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different.”
“As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the US which is an economically advanced country but has low gas prices.” the report stated
As seen from the report, the top oil-producing countries in Africa also presented different petrol prices with some registering high costs while some others recorded low petrol costs.
According to the data, the table below shows the different petrol prices as recorded in different oil-producing countries in Africa;
| Rank | Country | Price/litre |
|---|---|---|
| 1 | Libya | $0.03 |
| 2 | Angola | $0.33 |
| 3 | Egypt | $0.34 |
| 4 | Algeria | 0.343 |
| 5 | Sudan | $0.70 |
| 6 | Ethiopia | $0.72 |
| 7 | Nigeria | $0.77 |
| 8 | Tunisia | $0.80 |
| 9 | Gabon | $0.92 |
| 10 | Ghana | $1.04 |
According to the data, Libya has the lowest petrol price on the continent at $0.031 per litre, ranking second globally.
Angola followed closely at $0.329 per litre, Egypt at $0.335 per litre, Algeria at $0.343 per litre, Sudan at $0.700 per litre, and Ethiopia at $0.718 per litre.
The data also showed that Ghana’s price was highest at $1.95 per litre. Gabon’s price came second highest at $0.952 while Nigeria sold for $0.768 as of December 16, 2024.
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However, following a recent collaboration between the Nigerian National Petroleum Company Limited (NNPCL), Dangote refinery and petroleum marketers, Nigeria’s fuel price has been reduced to between N935 per litre and N965 which is about $0.6 per litre.
