Global fuel subsidies rise as Nigeria faces high petrol costs

Global energy markets are experiencing significant shockwaves due to the disruption of energy flows through the Strait of Hormuz, driven by the US-Iran war and the subsequent closure of the shipping route. According to the International Energy Agency (IEA), more than 115 countries have implemented measures to respond to this energy crisis. This includes 94 governments introducing price-support measures such as fuel subsidies, price caps, and tax interventions, while 58 countries have adopted energy conservation measures.

In contrast to these global interventions, Nigeria continues to face rising petrol and diesel prices. Pump prices have risen above N1,300/litre in some regions before settling around N1,200/litre. This increase in energy costs has led to higher expenses for transportation, food, and general business operations.

Jérôme Bilodeau, the IEA’s head of analysis for its Office of Energy Efficiency and Inclusive Transitions, noted during a webinar that while demand-side measures can moderate the impact of the disruption, they cannot replace the massive volume of energy typically transiting through the Strait of Hormuz.