•Finance minister, Wale Edun
The federal government has said it will not step in to control petrol prices despite rising tensions in the Middle East that are causing uncertainty in the global oil market.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government would continue to allow market forces to determine the price of petroleum products.
He explained that government intervention would only be considered if all other options fail.
Edun spoke during an interview on Channels Television last night.
According to him, the current economic direction of the administration of President Bola Ahmed Tinubu is built on market-based policies, particularly in the pricing of fuel and the management of foreign exchange.
“Rather than now reverting back and taking a backward step, we will look at every other measure that can help the cost of living of Nigerians without resorting to non-market pricing,” Edun said.
He explained that allowing petrol prices to be determined by market forces was a key reform introduced by the present administration to correct long-standing distortions in the Nigerian economy.
“It is the market price. That is what has been instilled by Mr President that was missing for so long, market pricing of petroleum products,” he said.
Edun noted that the ongoing crisis in the Middle East could still affect global oil markets, but said the government would respond through policy measures aimed at easing the impact on Nigerians instead of fixing prices.
One of such measures, he said, is the expansion of the compressed natural gas (CNG) programme, which is designed to reduce transportation costs.
According to him, the government has approved additional support to accelerate the conversion of vehicles from petrol to CNG.
“One of the ways the President immediately announced was 100,000 extra CNG conversion kits to enable vehicles convert to CNG fuel, which is maybe 25 to 30 per cent of the cost of petrol,” Edun said.
He said the government would continue to look for ways to reduce the cost of living without interfering with market pricing.
When asked whether the government could step in if petrol prices rise sharply, the minister said intervention would only happen in extreme circumstances.
“Normally, given the policies and philosophy of this government, it would always have to be a last resort,” he said.
Edun also pointed to Nigeria’s growing local refining capacity as a major factor that could help the country manage shocks in the global energy market.
He explained that Nigeria consumes about 50 million litres of petrol daily and that local refineries now have the capacity to meet that demand.
“Our demand is about 50 million litres per day and the refiners say they can meet that demand, so we are in a relatively strong position,” he said.
Among the key facilities contributing to this capacity is the Dangote Refinery, alongside other emerging refining projects across the country.
Edun said the presence of domestic refineries is helping Nigeria become more resilient at a time when some countries are struggling with fuel shortages due to global supply disruptions.
“At this time the resilience that the Nigerian economy has is coming largely from the fact that we do have that investment in refining,” he said.
However, he admitted that international developments could still affect Nigeria through various economic channels. These include higher freight charges, supply chain disruptions and increased production costs.
“You have gains on one side from higher oil prices but you also have costs on the other side, particularly freight and other supply chain disruptions,” the minister said.
He also warned that continued inflation across the world could lead to higher global interest rates, which would increase borrowing costs for many countries, including Nigeria.
Despite these challenges, Edun said Nigeria’s economy has shown resilience in the face of recent global shocks.
According to him, the country has recorded improvements in several key areas, including exchange rate stability, rising external reserves, slowing inflation and stronger economic growth.
He said the reforms introduced by the current administration, such as the removal of petrol subsidy and the unification of exchange rates, have helped stabilise the economy after years of structural challenges.
Edun disclosed that when the present government came into office, Nigeria’s public debt stood at about N122 trillion. This figure included around N30 trillion in Ways and Means advances from the Central Bank of Nigeria that were later regularised as part of efforts to improve fiscal transparency.
He added that exchange rate adjustments also increased the naira value of the country’s debt by about N47 trillion, raising the burden of debt servicing.
“We are coping with a huge debt service burden which was inherited,” the minister said.
On efforts to reduce poverty, Edun said the government is focusing on achieving stronger economic growth that can lift more Nigerians out of hardship.
According to him, Nigeria’s economy has recently recorded growth of around four per cent, but the government aims to increase this to at least seven per cent every year.
He explained that higher growth would create more jobs and reduce poverty across the country.
The minister said the government’s social protection programme has already supported about 10 million households, which represents roughly 50 million Nigerians through direct cash transfers.
He added that the administration is also working to expand access to financing for micro, small and medium enterprises, which account for about 85 per cent of private sector activity in Nigeria.
Edun disclosed that new programmes are being developed in partnership with development organisations to provide affordable loans to small businesses in order to boost productivity and create jobs.
He said the government’s economic reforms have also created new opportunities for local investors by stabilising the naira and improving the overall economic environment.
“If in November 2024 you bought dollars at 1,900 and you are now selling at 1,400, what that shows is that the naira is now worth holding,” Edun said.
According to him, this trend encourages people to save and invest within the Nigerian economy while making the country more attractive to both domestic and foreign investors.
Edun added that the government is also encouraging domestic production to strengthen the country’s economic resilience in the face of global disruptions.
He said projects such as the National Single Window initiative are being introduced to improve Nigeria’s export competitiveness and make trade easier within regional markets such as the Economic Community of West African States and the African Continental Free Trade Area.
While acknowledging that global developments may still pose risks, the minister said the government remains focused on protecting recent economic gains and ensuring that food and living costs remain manageable for Nigerians.
