The Economic Factors Behind High Petrol Prices in Oil-Producing Countries
The cost of petrol in oil-producing countries is influenced by a complex interplay of market forces, government policies, and economic factors. Known as Premium Motor Spirit (PMS), the price of petrol can vary significantly from one country to another, shaped by unique governance, infrastructure, and resource management strategies.
According to the December 2024 Gasoline Price Report by Global Petrol Prices, the global average petrol price during that period stood at $1.24 per litre.
Disparity in Global Petrol Prices
However, this average masks significant variations across countries, largely due to differences in taxation and subsidies. The report highlights how the retail price of petrol is influenced by the levels of taxes and subsidies imposed by each country.
Richer nations tend to have higher petrol prices, while poorer countries and major oil producers often enjoy lower prices. The United States is a notable exception, with relatively low petrol prices despite its economic advancement.
The report also sheds light on the diverse petrol prices among top oil-producing countries in Africa. Some nations experience high petrol costs, while others benefit from lower prices. The table below illustrates the petrol prices in select African oil-producing countries:
Among the highlighted countries, Libya boasts the lowest petrol price in Africa at $0.031 per litre, ranking second globally. Other countries like Angola, Egypt, Algeria, Sudan, and Ethiopia also enjoy relatively low petrol prices. On the other hand, Ghana, Gabon, and Nigeria have higher petrol prices, with Ghana leading at $1.95 per litre.
Recent collaborations between the Nigerian National Petroleum Company Limited (NNPCL), Dangote Refinery, and petroleum marketers have led to a reduction in petrol prices in Nigeria. The new price range of N935 to N965 per litre (approximately $0.6) reflects this positive development.
