Odesola JF., PhD
There is a painful reality that Nigerians no longer need an economist to explain to them: life has become brutally expensive.
Walk into a market and the story is there. Enter a petrol station and the story is there. Pay school fees, hospital bills, house rent, transportation costs or electricity bills, and the story is repeated.
Nigeria is not merely experiencing an economic debate on paper. Nigerian families are living the consequences in their kitchens, businesses, homes and pockets.
A mother who once bought enough food for a week with a certain amount of money now returns from the market with considerably less. A commercial driver increases his transport fare because fuel has become more expensive, and the passenger complains because his salary has not increased proportionately. A small manufacturer spends more on diesel and transportation and passes part of the cost to consumers. The consumer then complains that everything is becoming unaffordable.
It is a chain reaction.
And this is why the argument about petrol prices deserves more than political slogans.
The painful truth about fuel
Fuel price is one of the most visible prices in any economy.
It is different from many economic indicators because Nigerians encounter it physically. The motorist sees the price at the filling station. The transport worker feels it in operating costs. The farmer feels it in moving produce. The trader feels it in transportation. The manufacturer feels it in logistics and energy costs.
Ultimately, the ordinary household feels it in the price of food.
The World Bank has acknowledged that Nigeria’s recent reforms have improved several macroeconomic indicators, including revenue, external balances and economic growth. But it has also stressed that these improvements have not yet translated sufficiently into better household welfare.
That is the Nigeria we must talk about.
Not merely the Nigeria of GDP figures.
Not merely the Nigeria of foreign reserves.
Not merely the Nigeria of fiscal numbers.
The Nigeria of the ordinary family.
But are we really comparable to the Gulf states?
This is where our national conversation sometimes becomes misleading.
Whenever petrol becomes expensive, somebody inevitably asks: “But Nigeria is an oil-producing country. Why should Nigerians pay so much for petrol? Look at Saudi Arabia. Look at Kuwait. Look at the UAE. Look at Qatar.”
The question is understandable.
The comparison, however, requires much more context.
Nigeria is unquestionably an oil-rich country. But having oil is not the same thing as having the same oil wealth per person as Saudi Arabia, Kuwait or the United Arab Emirates.
That distinction is enormous.
According to OPEC’s petroleum statistics, Nigeria has a very substantial proven crude-oil reserve base. But the population sharing those resources is vastly larger than the populations of most Gulf oil producers.
Think about that for a moment.
Nigeria has more than six times Saudi Arabia’s population.
So when somebody says, “Nigeria has oil just like Saudi Arabia,” the statement may be technically true but economically incomplete.
It is like saying two families each own a bag of rice without mentioning that one family has five people while the other has fifty.
The quantity may look similar.
The burden is not.
Per capita is where the argument changes
The figures supplied in the original analysis make the point dramatically: Nigeria’s approximately 37 billion barrels of proven reserves are spread across roughly 238 million people.
That works out to only around 156 barrels of proven reserves per Nigerian, using the stated reserve and population figures.
Compare that with the much smaller populations of countries such as Kuwait, the UAE, Qatar and Saudi Arabia.
The difference becomes striking.
But there is an important caution: reserves per person do not equal money in citizens’ bank accounts.
Oil reserves are underground assets. They are not cash.
A country must explore, develop, produce, transport and sell the oil. It must also convert petroleum income into public services, infrastructure, investment and household prosperity.
Therefore, reserves per capita are useful for understanding resource endowment, but they are not by themselves a measure of citizens’ living standards.
That distinction is important because Nigeria’s problem is not simply that we have insufficient oil.
Our problem is what we produce, what we earn, what we retain, what we spend and what we build with what we earn.
Production matters too
There is another issue that is often ignored: oil production is not the same as oil reserves.
A country may possess enormous reserves underground but produce relatively modest quantities because of investment constraints, technical challenges, insecurity, infrastructure limitations, mature fields or other factors.
This is another reason why comparing Nigeria’s petrol prices directly with those of Gulf producers can be misleading.
Saudi Arabia operates at a very different scale of petroleum production. OPEC’s statistics show the enormous production capacity of the major Gulf producers, while Nigeria’s crude production has historically been constrained by several structural challenges.
So the question should not simply be:
“How much oil do we have?”
We should also ask:
How much do we produce?
How efficiently do we produce it?
How much revenue reaches government?
How much is lost through inefficiency and leakage?
How much is invested in infrastructure?
How much is converted into electricity, education, healthcare, transportation and jobs?
And perhaps the most important question:
What does the ordinary Nigerian receive from the country’s natural resources?
Nigeria’s real problem is bigger than petrol
This is where the national conversation must become more courageous.
Nigeria cannot solve its economic problems by discussing petrol alone.
We have a productivity problem.
We have an electricity problem.
We have a transportation and logistics problem.
We have a manufacturing problem.
We have a skills and employment problem.
We have a public-sector efficiency problem.
We have a tax and revenue problem.
We have a corruption and accountability problem.
And, above all, we have a governance-to-living-standard conversion problem.
Consider the ordinary Nigerian entrepreneur.
A woman making bread in Ibadan may have a good recipe, willing customers and hardworking employees. But if electricity is unreliable, she must find alternative power. If transportation is expensive, distribution costs rise. If raw materials become more expensive because of exchange-rate pressures, production costs rise again.
She may increase her price.
The customer complains.
But the woman is not necessarily becoming richer.
The entire economy is simply becoming more expensive.
That is the tragedy.
The subsidy question must also be handled honestly
There is another uncomfortable truth.
Keeping petrol prices artificially low through an enormous subsidy system is not automatically a compassionate economic policy.
If government borrows money or sacrifices other essential spending to maintain a price that cannot be sustained, the bill does not disappear.
It moves.
It moves into public debt.
It moves into inflation.
It moves into reduced investment.
It moves into weaker public services.
But recognizing the problems with subsidies does not mean we should ignore the suffering caused by removing them.
That would be equally dishonest.
An unsustainable subsidy system can be problematic.
And removing it can impose severe hardship on millions of people.
Both things can be true at the same time.
The responsibility of government is therefore not merely to remove distortions. It is to ensure that the transition does not crush the people it is supposed to serve.
Macroeconomic success must eventually reach the kitchen
This is perhaps the greatest test of Nigeria’s economic reforms.
There are encouraging signs in the macroeconomic data.
But let us imagine a Nigerian father sitting at his dining table with his wife and three children.
His salary has not increased significantly.
Food is expensive.
Transportation is expensive.
School fees are demanding.
Rent is rising.
Electricity costs are painful.
Healthcare is expensive.
That family may hear that GDP is growing.
They may hear that foreign reserves are improving.
They may hear that international institutions are becoming more positive about Nigeria.
But the question in their minds remains simple:
“When will I feel it?”
That question cannot be dismissed.
Economic policy ultimately exists for human beings.
Nigerians are hurting—but Nigeria is not helpless
We must therefore resist two extremes.
The first is the simplistic argument that says, “Nigeria has oil, therefore petrol must be cheap.”
The second is the equally simplistic argument that says, “The reforms are necessary, therefore Nigerians should simply endure whatever happens.”
Neither position adequately captures the complexity of the situation.
Nigeria needs reforms, but it also needs compassion.
Nigeria needs fiscal discipline, but it also needs investment.
Nigeria needs higher productivity, but it also needs better wages.
Nigeria needs to eliminate waste, but it must simultaneously strengthen social protection.
Nigeria needs private-sector investment, but businesses cannot thrive without reliable electricity, security, infrastructure and predictable policies.
And Nigeria needs to stop treating corruption as an abstract moral problem. Every naira diverted from a road, hospital, school, water project or electricity investment eventually appears somewhere else as a higher cost for ordinary Nigerians.
The Gulf comparison should teach us something else
Perhaps the most useful lesson from the Gulf states is not that Nigeria should copy their petrol prices.
It is that natural resources become transformative only when they are embedded in systems capable of converting resource wealth into productive national capacity.
The real question is not:
“Why is petrol cheaper in Saudi Arabia?”
The better question is:
“Why has Nigeria, despite decades of oil production, not yet built an economy in which citizens enjoy reliable electricity, efficient transportation, productive industries, quality healthcare, good schools and decent-paying jobs?”
That is the question that should keep policymakers awake.
Because Nigeria’s future cannot depend forever on the price of crude oil.
Oil is finite.
The population is growing.
The world is changing.
Energy systems are changing.
Technology is changing.
And Nigeria must build an economy that can prosper beyond petroleum.
The hurting Nigerian deserves more than statistics
At the heart of all this is a human being.
The taxi driver trying to feed his family.
The civil servant whose salary disappears before the month ends.
The farmer struggling with transport costs.
The young graduate searching endlessly for employment.
The small-business owner paying for fuel, diesel, rent and wages.
The mother standing in a market wondering how a basket that once cost one amount now costs something dramatically different.
These are not statistics.
They are Nigerians.
And they are hurting.
Therefore, the measure of Nigeria’s economic progress should ultimately be bigger than GDP growth.
It should be whether the Nigerian worker can afford food.
Whether the entrepreneur can produce competitively.
Whether the child can attend a good school.
Whether the sick can receive treatment.
Whether electricity is dependable.
Whether transportation is affordable.
Whether a young person can find productive work without having to leave the country.
Whether a family can look into the future without fear.
That is the Nigeria we must build.
So yes, Nigerians are hurting.
But the answer cannot simply be cheaper petrol.
And it cannot simply be higher petrol prices.
The answer is a productive, accountable and diversified economy in which Nigeria’s enormous human and natural resources are converted into broad-based prosperity.
The oil is under our soil.
The people are above it.
The ultimate responsibility is to build a system in which the wealth beneath the ground improves the lives of the people living above it.
That is the real conversation Nigeria must have.
