The high cost of petrol in oil-producing countries is the result of a combination of market forces, policies, and economic factors.
This elevated cost of petrol, or Premium Motor Spirit (PMS), can be attributed to a range of economic, political, and structural factors that differ significantly from one country to another.
Each nation’s situation is unique, shaped by its governance, infrastructure, and resource management strategies.
According to the January 2025 Petrol Price Report published by Global Petrol Prices, the global average price of petrol during this period was $1.24 per litre.
The report explained that these price discrepancies are driven by the varying levels of taxes and subsidies imposed on gasoline in different regions.
In these countries, the high fuel cost reverberates through their economies, inflating transportation costs, food prices, and overall living expenses, disproportionately affecting the most vulnerable populations.
For some countries paying the highest prices, the absence of domestic oil production often forces reliance on imports, leaving them vulnerable to global market volatility and currency fluctuations.
These challenges frequently exacerbate already fragile economies, turning even minor increases in fuel prices into significant burdens for households and businesses alike.
The report stated, “All countries have access to the same petroleum prices from international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different.
“As a general rule, richer countries have higher prices, while poorer countries and those that produce and export oil have significantly lower prices.”
In contrast, oil-rich nations such as Algeria, Libya, and Angola enjoy some of the lowest fuel prices in the world. These countries rely on government subsidies to keep fuel affordable, easing transportation and energy costs for their citizens.
Low fuel prices offer relief to citizens and affordable fuel often translates to lower living costs, easing the financial burden on households.
While many African countries struggle with rising fuel costs, a few benefit from specific conditions that help keep prices down.
Countries with advanced refining infrastructure can process crude oil locally, cutting costs associated with importing refined products.
Tribune Online lists ten African countries with the cheapest fuel prices in January 2025.
1. Libya – $0.031 (N47.436) per litre
Libya is one of the largest oil producers in Africa, with significant domestic oil reserves as the country is heavily subsidised by its government, which helps maintain low fuel prices for consumers.
2. Angola – $0.328 (N509.931) per litre
Angola is Africa’s second-largest oil producer. Despite being an oil-rich country, Angola’s government heavily subsidizes fuel, contributing to its low prices. However, these subsidies also strain the national budget.
Angola’s economy is heavily dependent on oil exports, and fluctuations in global oil prices can have a significant impact.
3. Egypt – $0.339 (N525.622) per litre
Egypt’s fuel prices are subsidised by the government, though there have been recent efforts to reduce these subsidies in an attempt to improve the country’s fiscal position. Still, fuel prices remain relatively low compared to many African nations.
4.Algeria – $0.340 (N528.279) per litre
Algeria is a major oil and gas producer in Africa. The government heavily subsidizes fuel prices to ensure affordability for its citizens, making fuel one of the cheapest in the region.
5. Sudan – $0.700 (N1086.917) per litre
Sudan has large oil reserves, and the government traditionally subsidises fuel prices to ensure accessibility. However, the country’s fuel market faces challenges due to economic sanctions, political instability, and fluctuating oil production levels. Sudan’s economic struggles, including hyperinflation and international sanctions, impact its ability to maintain fuel subsidies.
6. Nigeria – $0.763 (N1184.830) per litre
Nigeria has significant reserves and oil exports.
In recent weeks, fuel prices have experienced significant fluctuations across the country.
These price variations are influenced by factors such as global crude oil prices, domestic refining capacities, and distribution logistics.
The Nigerian National Petroleum Company Limited (NNPCL) and private refineries, including Dangote Refinery, have adjusted their prices in response to these dynamics.
7. Tunisia – $0.791 (N1228.859) per litre
Tunisia’s government subsidises fuel, keeping prices low for consumers. Tunisia imports much of its oil, but subsidies help offset the costs, making fuel more affordable than in many neighbouring countries.
8. Ethiopia – $0.804 (N1247.972) per litre
Ethiopia’s fuel prices are kept relatively low by government subsidies, though the country imports a significant portion of its oil. Ethiopia’s government seeks to support affordable energy prices for its rapidly growing population.
9. Liberia – $0.813 (N1261.813) per litre
Liberia benefits from fuel imports at relatively low international costs and some government subsidies. The fuel sector is largely controlled by private companies, but prices remain among the lowest in the region due to minimal taxes and import duties.
10. Gabon – $0.945 (N1466.844) per litre
Gabon is an oil-producing country, with significant petroleum exports and the government provides subsidies to keep fuel prices lower than many other countries in Africa, helping to support the local economy.
ALSO READ FROM NIGERIAN TRIBUNE
Top 10 African countries with lowest fuel prices in December 2024
