Nigeria petrol affordability is misleading, says economist Banji Oyelaran-Oyeyinka, citing low wages and structural challenges as key factors

Economist and former Senior Special Adviser to the President of the African Development Bank on Industrialisation, Banji Oyelaran-Oyeyinka, has warned that claims suggesting petrol is cheap in Nigeria are misleading, describing such comparisons as a “fallacy of one price petrol comparison.”

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Speaking on Saturday, Oyelaran-Oyeyinka highlighted that the global economy is facing significant shocks, with the S&P 500 Index losing $5 trillion over two weeks due to ongoing geopolitical and economic disruptions.

He argued that assumptions about low petrol prices insulating Nigerians from global crises are flawed.

“The backdrop here is that Nigerians are somehow insulated from this crisis because we do or should enjoy, likely the ‘cheapest’ petrol in the world,” he said.

“Low nominal petrol prices in Nigeria do not translate to affordability.”

The economist stressed that structural challenges—including low wages, high inflation, and limited purchasing power—make Nigerian workers more vulnerable to global oil shocks than citizens in countries with higher fuel prices.

He explained that true purchasing power should be measured by labour time rather than currency conversion. “For a Nigerian minimum-wage worker, earning $2 takes approximately 460 minutes, or nearly 7.7 hours,” he said, compared with about 16.5 minutes in the United States and seven minutes in the United Kingdom. “This metric directly links global commodity prices to the daily reality and experience of the workforce.”

Oyelaran-Oyeyinka noted that while petrol per litre in Nigeria may appear low in nominal terms, the effective cost relative to income is high.

“Petrol to be realistic becomes a luxury item,” he said, emphasising that affordability should be assessed relative to wages and productivity, not just the price at the pump.

He argued that economic resilience requires a stronger domestic manufacturing base and diversified exports.

“Productivity or time-to-earn a wage is the metric that reveals the true cost of labour and exposes the fallacy of a single price comparison,” he said.

The expert also cautioned against comparing Nigeria with advanced economies. “An underdeveloped country like us should not be compared with a superpower USA, UK or any other OECD country because of the simple reason that we have not earned that distinction,” Oyelaran-Oyeyinka said.

Concluding his remarks, he underscored that achieving structural transformation is essential to making petrol, food, and housing truly affordable for Nigerians.

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“We remain so until we achieve structural transformation of the Nigerian economy,” he said.