The Major Energies Marketers Association of Nigeria (MEMAN) has said that low taxation is one of the main reasons why petrol is cheaper in Nigeria than in other West African countries. MEMAN’s Executive Secretary and Chief Executive Officer, Clement Isong, made this known while reacting to recent comments by billionaire businessman Aliko Dangote on Nigeria’s fuel pricing.
Isong supported Dangote’s claim that Nigerians pay only about 55 per cent of what citizens in neighbouring countries pay for petrol. According to him, in some West African countries, the price of petrol is up to 50 per cent higher than what Nigerians currently pay.
“Yes, in some countries, it’s even less. It’s as low as 50 per cent,” Isong said, noting that Nigeria’s fuel taxes are significantly lower than elsewhere. He explained that Nigeria only imposes about 1 per cent in taxes on fuel consumption, broken into 0.5 per cent for infrastructure funds and 0.5 per cent for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
“The taxation is lower in Nigeria. The taxation on fuel consumption in other countries is higher. The only taxation in Nigeria, I would say, is one per cent,” he said.
He also linked the lower fuel prices in Nigeria to what he described as “economies of scale.” According to him, Nigeria’s large population and high fuel consumption rates help keep prices low due to high turnover and faster product circulation.
“Nigeria has economies of scale. The turnover is high, the consumption is high. We are one of the largest economies in Africa, maybe second, third, or fourth. Because of that, the cost per unit is lower. In other countries, products take longer to sell due to smaller markets and slower economic activity,” Isong explained.
Backing this position, Dangote also told ECOWAS leaders during a recent visit to his 650,000-barrel-per-day refinery that many Nigerians are not aware they are currently paying far less for fuel compared to neighbouring countries. He said the refinery has been selling petrol at between ₦815 and ₦820 per litre, compared to an average of $1 (about ₦1,600) per litre in other West African countries.
“In neighbouring countries, the average price of petrol is around $1 per litre, which is ₦1,600. But here at our refinery, we’re selling between ₦815 and ₦820. Many Nigerians don’t realise that they are paying just 55 per cent of what others in the region are paying,” Dangote stated.
He also highlighted how his refinery has played a major role in cutting down the prices of other petroleum products, such as diesel. According to him, the refinery helped reduce the price of diesel from ₦1,700 to ₦1,100, which positively affected sectors like mining and agriculture.
“Last year, when we began diesel production, we reduced the price from ₦1,700 to ₦1,100. This has had a big impact on different industries. It helped mining, agriculture, and more,” Dangote added.
However, some fuel importers and marketers have complained that the Dangote refinery’s regular price reductions are hurting their businesses. They said the continuous drop in prices has led to significant losses running into billions of naira.
When asked about the effect of Nigeria’s cheaper fuel on smuggling across the borders, Isong declined to comment in detail. He said he couldn’t confirm the current level of smuggling, though he believed it may have reduced.
“I can’t say. I don’t know the level of smuggling now. Maybe it has gone down. Has it stopped? I wouldn’t know,” he said.
Dangote also used the opportunity to encourage more regional trade within Africa, saying the continent can benefit greatly if countries support each other’s industries and build stronger trade links.
