Globally, the average price of petrol is between $1.24 and N1910.60 per litre, but these prices vary from country to country.
The differences in prices across countries are due to the various taxes and subsidies for diesel as all countries have access to the same petroleum prices of international markets but then decide to impose different taxes, reports GlobalPetrolPrices.com.
Generally, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices.
Cheaper petrol means lower operational costs in businesses like shipping, manufacturing, and agriculture, which boosts profitability and encourages expansion.
Iran tops the list with the cheapest petrol prices in December at $0.029 and N44.121
These prices are influenced by government subsidies, local taxation policies, and the cost of crude oil. Oil-producing nations often have lower petrol prices due to subsidies and reduced taxation.
However, while these countries offer lower petrol prices, the overall cost of living and average income levels vary significantly. Additionally, global oil market fluctuations and domestic economic policies can lead to changes in fuel prices over time.
The key factors that influence cheaper petrol prices include government subsidies, abundant resources, production costs, and political and social stability.
These factors create an environment where petrol is surprisingly cheap in these countries, reflecting their unique resource endowments and economic policies.
Below are the 10 nations with the lowest fuel prices in December 2024:
1. Iran
Iran boasts the world’s cheapest fuel, priced at just $0.029 per litre (44.121 Naira). its enormous reserves allow it to make petrol at a low cost and it is extensively subsidised by the government to help citizens maintain economic stability. Even though Iran’s ability to sell oil has been hampered by economic sanctions, the country nonetheless views fuel affordability as a right.
Challenges: Refinery efficiency has been impacted by international sanctions, which have restricted access to foreign technologies. Fuel smuggling to neighbouring nations with higher pricing and excessive usage are additional factors.
2. Libya
In Libya, fuel costs $0.031 per litre (47.335 Naira), making it the second cheapest globally. It has Africa’s largest proven oil reserves, which makes it a resource-rich country. As part of a welfare plan, the Libyan government places a high value on maintaining cheap fuel prices for its citizens despite political unrest and violence. Due to the low cost of domestic oil production, the government can significantly subsidise petrol.
Challenges: The smuggling of subsidised petrol to neighbouring countries has been a recurring issue, leading to loss of revenue.
3. Venezuela
Venezuela offers fuel at $0.035 per litre (53.985 Naira), ranking among the world’s cheapest. It has some of the largest proven oil reserves globally, which allows for low production costs. As part of the nation’s social agenda, the government subsidises petrol to almost zero prices.
Cheap fuel is seen as a political tactic to keep the populace happy in the face of economic uncertainty.
Challenges: Hyperinflation has devalued the currency, making subsidies unsustainable in the long run, and nfrastructure and refinery mismanagement have led to occasional shortages despite the low prices.
4. Angola
In Angola, fuel is priced at $0.329 per litre (507.160 Naira). As a leading oil producer in Africa, the country benefits from domestic production, enabling relatively affordable fuel. Subsidies ensure that petrol remains affordable for citizens, even in rural areas. Oil revenue supports the economy, enabling reduced costs for local fuel.
Challenges: Economic inequality means that subsidies may not benefit all citizens equally and diversifying the economy beyond oil remains a challenge.
5. Egypt
At $0.335 per litre (516.190 Naira), Egypt’s fuel prices reflect its dual role as a producer and consumer of petroleum. Egypt subsidises fuel to make it affordable, particularly for lower-income groups. As part of recent economic reforms, the government has introduced gradual subsidy reductions but kept prices lower than global averages. Local oil production and refinery capacity help reduce dependence on imports.
Challenges: Balancing subsidy costs with national economic reforms and addressing fuel smuggling to neighbouring countries.
6. Kuwait
Fuel in Kuwait costs $0.341 per litre (526.289 Naira). Kuwait, with one of the lowest production costs globally, has significant oil reserves that allow for cheap petrol. The government provides subsidies as part of its social welfare programs for citizens. Petrol prices are part of a broader policy to share the wealth from oil revenues with the population.
Challenges: Subsidy reforms are occasionally debated to reduce the financial burden on the government and heavy reliance on oil exports for revenue.
7. Algeria
Algeria offers fuel at $0.343 per litre (529.710 Naira) and as a significant oil and gas producer, it uses subsidies to make energy affordable for its citizens. Algeria’s vast oil and natural gas reserves help maintain low petrol costs as government subsidies aim to ensure affordability for citizens and reduce the cost of transportation and goods. State-controlled oil production ensures low domestic prices.
Challenges: Dependence on oil revenue makes the economy vulnerable to fluctuations in global oil prices and subsidy reforms have been proposed but face public resistance.
8. Turkmenistan
Turkmenistan sells fuel at $0.427 per litre (659.157 Naira). Rich in natural gas and oil reserves, Turkmenistan keeps fuel prices low through state-controlled pricing and subsidies. Citizens benefit from government policies that provide cheap utilities, including petrol and domestic oil and gas production ensuring affordability without reliance on imports.
Challenges: Economic isolation limits access to global markets and technology and sustainability of subsidies is uncertain in the long term.
9. Malaysia
Malaysia sells petrol at $0.460 per litre (710.159 Naira). As a net oil exporter, Malaysia benefits from domestic production to keep petrol prices low and government subsidies ensure affordability for citizens while promoting economic growth. A combination of market-driven pricing and government interventions has kept prices stable.
Challenges: Balancing subsidies with fiscal responsibility and potential vulnerability to global oil price volatility.
10. Kazakhstan
Kazakhstan’s fuel price is $0.466 per litre (718.741 Naira). Rich in oil and gas resources, the Central Asian nation maintains relatively low energy costs for its citizens. production costs low.
Challenges: Limited oil reserves compared to its neighbours and efforts to diversify the economy may affect future fuel subsidy policies.
