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An economist and former special adviser to the president of the African Development Bank on industrialisation, Banji Oyelaran-Oyeyinka, has outlined why petrol priced at N1,300 per liter remains unaffordable for many Nigerians earning the N70,000 minimum wage.
In a statement released on Saturday, Oyelaran-Oyeyinka warned against comparing fuel prices through direct conversion of the naira to foreign currencies, describing the approach as misleading.
“When you do a direct conversion of this naira to dollars/pounds, you generate an economic fallacy; it confuses and misleads folks,” he said.
He explained that Nigeria’s economic structure, distorted by low incomes, rising inflation, and weak purchasing power, makes petrol costly for most citizens, irrespective of its nominal price.
According to him, fuel pricing cannot be evaluated in isolation, as some analysts make Nigerians believe.
He noted that fuel affordability is largely determined by income levels and broader economic conditions.
“The price per liter in Nigeria of N1,300… is just one variable in a complex set of development equations,” he said, noting that people in low-income economies often operate at subsistence levels, making petrol a luxury.
Oyelaran-Oyeyinka also maintained that purchasing power parity provides a more realistic gauge of affordability than simple currency comparisons.
“Purchasing power parity is made clearer not by direct currency conversion, but by how long a worker must labor to earn a given sum,” he explained.
He added: “Low nominal petrol prices in Nigeria do not translate to affordability.”
DAILY POST reports that petrol prices have climbed by more than 50 percent in recent weeks, increasing to between N1,361 and N1,380 per liter in Abuja, up from earlier prices of N875 to N900.
The hike followed successive price increases by Dangote Refinery, which raised its gantry price to about N1,200 per liter in March.
Fuel in Nigeria not cheap, stop naira-to-dollar conversion comparison – Oyelaran-Oyeyinka warns
