Organised Labour, NLC urge government to act as fuel price soars to N1,400 per litre

The Organised Private Sector and the Nigeria Labour Congress have called for immediate government intervention as petrol prices have surged to nearly N1,400 per litre across parts of the country, sparking fears of worsening inflation, job losses, and business closures.

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This development comes on the heels of successive price increases by the Dangote Petroleum Refinery, which recently raised its ex-depot price to about N1,275 per litre, marking its fifth hike in March, and has intensified concerns over pricing dynamics in Nigeria’s deregulated downstream petroleum sector.

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Following the last hike over the weekend, petrol prices jumped from N1,240 to nearly N1,400, depending on the location, with reports indicating that petrol prices are higher in the North, while those in Lagos and Ogun still buy at rates around N1,340.

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The surge in petrol prices was triggered by the US-Israel-Iran war in the Middle East, which has led to a rise in oil prices, causing the Dangote refinery to also hike fuel prices in Nigeria, resulting in an increase in the cost of living.

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From an average of N839 before February 28, a litre of petrol has risen by about N500, with analysts fearing that the price could hit N1,500 to N2,000 if the crisis continues with the Strait of Hormuz closed.

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Stakeholders have urged the Federal Government to introduce immediate relief measures, including tax incentives for refiners, naira-based crude supply, and temporary subsidies, while accelerating long-term reforms in the energy sector.

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However, the regulator and marketers have argued that the Federal Government cannot cap petrol prices as done in China, saying the sector is deregulated, and instead, have called for a review of the fiscal burden on refiners.

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The Nigeria Labour Congress has lamented that Nigerians are paying the price for alleged monopoly in the downstream petroleum sector, with the NLC Assistant Secretary-General, Onyeka Chris, stating that the poor Nigerian workers and the masses are “reaping the consequences of adopting a monopolist”.

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The union has drawn parallels with the cement industry, questioning why Nigerian-made cement is reportedly more expensive than in neighbouring countries like Ghana or Rwanda, and has emphasised that the downstream petroleum market operates as a “seller’s market”, in which dominant players control prices.

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The NLC has warned that Nigerians must organise to counter the economic concentration, stating, “Until we organise ourselves and exercise our sovereign will, there will be no mercy, we will not benefit from this country, and unions, workers, students, artisans, and citizens need to act together to challenge monopolistic control over essential commodities”.

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The Congress has also added that the monopolistic control in the petroleum sector reinforces calls for urgent government action to ensure fair fuel pricing and protect consumers.

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The Acting Secretary-General of the NLC, Benson Upah, has noted that geopolitical upheavals in the oil-rich Middle East have historically triggered shocks in the global oil market, but Nigeria’s vulnerability has been amplified by weak domestic buffers.

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Upah has stressed that countries with stronger economic management typically maintain strategic petroleum reserves to cushion such shocks, and has questioned Nigeria’s preparedness, arguing that the near-instantaneous impact of the crisis suggests either an absence of reserves or a failure to deploy them effectively.

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On policy responses, Upah has cautioned against adopting price caps, noting that Nigeria’s economic structure differs significantly from countries like China, where such measures have been used, and has instead advocated a temporary subsidy framework targeted at “the source” to cushion consumers without distorting the broader market.

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The NLC chief has called for a structural shift in Nigeria’s oil and refining strategy, urging the Federal Government to supply crude oil in naira to domestic refineries, including the Dangote refinery, to process crude for local consumption and the surplus for export.

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Upah has warned that the current windfall from higher global oil prices may not be sufficient to offset the broader economic fallout, and has also warned of a potential inflation spiral driven by rising energy costs, which could trigger wider economic and social consequences.

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The President of the Lagos Chamber of Commerce and Industry, Leye Kupoluyi, has said that excessive taxation on refineries is a major contributor to high pump prices and has urged the government to review the fiscal burden.

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Kupoluyi has added that multiple taxes imposed on refiners ultimately translate to higher fuel prices for consumers, and has stressed the need for collaboration between the government and refiners to ensure fair pricing.

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The Director-General of the Nigerian Employers’ Consultative Association, Adewale Oyerinde, has said that global crude oil realities continue to shape domestic fuel prices, limiting the ability of local refiners to sell below international benchmarks.

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Oyerinde has urged the government to deploy short-term relief measures, including tax incentives, while charting a long-term transition to cleaner energy sources, and has warned that if rising global oil prices continue unchecked, Nigeria risks business closures, job losses, and a deeper cost-of-living crisis.

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NECA has stressed that the situation is translating into increased energy costs in Nigeria, with significant consequences for businesses and households, and has noted that fuel prices have risen sharply in recent days, with petrol prices in some locations exceeding N1,300 per litre and diesel approaching N1,800 per litre.

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Oyerinde has mentioned that while the Middle East conflict has contributed to the rise in oil prices, the impact is exposing deeper structural weaknesses, underinvestment, weak infrastructure, and inefficiencies in Nigeria’s energy value chain.

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The government has been urged to stabilise the downstream sector and support vulnerable industries, with Oyerinde cautioning that if properly managed, this could strengthen the nation’s economy, but if not, the gains from rising oil prices will be completely eroded by inflation and economic hardship.

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In China, the government has limited the amount by which the country’s fuel costs can rise, to mitigate surging oil prices due to the Middle East war, but regulators and marketers of petroleum products in Nigeria have rejected price capping, saying Nigeria’s petroleum sector is a deregulated market.

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority has stated that limiting price hikes is like proposing a price cap, which is equal to regulating an already deregulated market, and the Independent Petroleum Marketers Association of Nigeria has said that the petroleum sector is not in the government’s hands but in the public’s hands.

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Meanwhile, oil prices have crashed to $98 on Monday, down from $112 in the early hours of Sunday, fuelling speculations of a possible reduction in petrol prices should the crash be sustained, after US President Donald Trump said he would postpone any military strikes against Iranian power plants for five days and cited peace talks to resolve hostilities in the Middle East.