Nigeria’s recent surge in fuel prices has led to widespread speculation, with many attributing the hike to local oil producers such as the Dangote Refinery. However, OPEC Secretary General Haitham Al Ghais has clarified that the actual cause lies elsewhere, primarily in the taxes imposed by governments.
In a statement released on Tuesday, Al Ghais emphasized that the high cost of fuel is more about government taxation than the operational costs of oil producers. “Revenues from fuel sales are predominantly earned by major oil-consuming countries through taxation, not by oil producers,” he stated.
Al Ghais revealed that between 2019 and 2023, OECD nations collected about $1.915 trillion more annually from petroleum products than OPEC countries earned from crude oil sales. In 2023 alone, taxes comprised around 44% of the final retail price of petroleum products in OECD countries, with some European countries seeing figures exceed 50%.
For Nigerian consumers, this means that the price at the pump is heavily influenced by government-imposed taxes rather than just the cost of crude oil or refinery margins. Al Ghais noted, “It is important to recognize that the price paid by consumers at the pump is determined by multiple factors, including crude oil prices, refining, transportation, and, notably, taxes.”
He also highlighted that while oil-producing countries do earn from oil sales, a significant portion is reinvested into exploration, production, and infrastructure to ensure a steady supply of energy. “This reinvestment is crucial for maintaining future oil supplies and stabilizing global energy markets,” he added.
Al Ghais called for a shift in perspective, urging a move away from the narrative that pits consumers against producers. “Both groups are stakeholders in the energy ecosystem,” he emphasized.
The current fuel price crisis in Nigeria underscores the complexity behind fuel pricing, where government taxes play a major role in determining the cost consumers face at the pump.
