Agbakoba proposes N400–N700 petrol price

Former President of the Nigerian Bar Association (NBA), Dr Olisa Agbakoba, SAN, has proposed a petrol pricing model that could bring the domestic pump price to between N400 and N700 per litre.

He also urged presidential candidates to clearly state their positions on petroleum pricing ahead of the 2027 general election.

Agbakoba, in a statement issued on Tuesday, advocated a differential pricing model that would separate domestic crude oil pricing from international market fluctuations, arguing that the approach could make petroleum products more affordable for Nigerians.

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He said the rising cost of living, driven partly by high fuel prices and their impact on transportation, food, rent, education and other essential goods, had made petroleum pricing a critical issue that presidential candidates could no longer ignore.

According to him, Nigerians deserve clear and practical explanations of how prospective leaders intend to address fuel prices and their wider effects on household incomes and economic activities.

Agbakoba identified four possible approaches to petroleum pricing: complete subsidy removal, a return to fuel subsidies, discount pricing and differential pricing.
According to him, each option had implications for government finances, consumers and the broader economy, adding that candidates should explain the framework they intend to adopt rather than make vague promises.

Under his preferred differential pricing model, domestic crude oil would be priced differently from crude sold in the international market, allowing locally consumed petroleum products to reflect domestic economic conditions.

Agbakoba said the approach would treat petroleum not merely as an export commodity whose value was determined by international market forces, but also as a strategic national resource that could be managed to serve the public interest.

He explained that a cost-plus-profit formula, designed to cover relevant costs while allowing a reasonable profit margin, could produce a domestic petrol price of between N400 and N700 per litre, assuming national consumption of approximately 40 million litres daily.

The proposed model, he argued, could offer a way to address affordability without returning to the conventional fuel subsidy arrangement, which he said could put pressure on government finances and create concerns about fiscal transparency.

On the other pricing options, Agbakoba said complete subsidy removal exposes consumers to international crude oil prices and exchange rate fluctuations, potentially transmitting global market changes to domestic pump prices.

A return to subsidies, he said, would involve government intervention to suppress prices, with possible implications for public spending and accountability.
The discount pricing approach, meanwhile, he said, would provide price reductions to selected sectors or vulnerable groups, offering targeted relief rather than a general reduction in petrol prices.

Agbakoba said the differential pricing model differed from these options by seeking to establish a domestic pricing framework based on local resource costs and a reasonable profit margin.

He maintained that no pricing arrangement was entirely without shortcomings, but argued that the proposed model deserved consideration as policymakers grappled with the pressure of rising living costs.

He cited former British Prime Minister Margaret Thatcher’s policy of allowing council tenants to buy their homes and a proposal by UK Conservative Party leader Kemi Badenoch to abolish inheritance tax on family homes as examples of policies that had attracted political attention.

According to him, petroleum pricing could similarly become a defining issue in Nigeria’s 2027 presidential election because of its far-reaching effects on household spending and business costs.

He urged presidential candidates to move beyond general campaign assurances and disclose the specific petroleum pricing policies they would pursue if elected.

Agbakoba said such clarity would enable Nigerians to assess the economic implications of the competing proposals and make informed decisions at the polls.