As global oil prices rise, Nigeria stands to make more money from selling crude oil. However, for ordinary Nigerians, the same increase could mean higher petrol prices, more expensive transportation and a further rise in the cost of living.
Nigeria may be heading towards a period of higher oil earnings as crude prices climb to almost $110 per barrel. However, while the development could bring more money into government coffers, it may also make life more expensive for millions of Nigerians.
On Friday, October 16, Brent crude oil, one of the world’s major oil price benchmarks, rose to $110 per barrel before closing at $109.86.
This is significantly higher than the $64.85 per barrel used by the Federal Government in preparing the 2026 budget.
In simple terms, Nigeria had planned its spending based on selling oil at about $65 per barrel. With international prices now approaching $110, the country could earn more than originally expected from its crude oil exports.
There is a catch though. The same increase that could bring more money to Nigeria may also increase the amount Nigerians spend on petrol, transportation and everyday goods.
Why higher oil prices should benefit Nigeria
Nigeria is one of Africa’s major crude oil producers. The country earns money by selling crude oil to buyers in other countries.
When international oil prices rise, Nigeria can earn more from each barrel sold.
For example, oil selling for $110 is worth $45 more per barrel than oil selling for $65.
If Nigeria sells millions of barrels at higher prices, the additional earnings could help the government fund roads, hospitals, electricity projects and other public services.
However, higher prices alone do not guarantee that Nigeria will make significantly more money.
The country must also produce enough oil to sell.
According to figures released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria produced an average of 1.53 million barrels of crude oil daily in September 2026.
This was below the government’s budget production target of 1.84 million barrels per day.
This means that although Nigeria may be selling oil at a higher price, it is producing less crude than it originally planned.
Also, not all money made from selling oil goes directly to the government. Production costs, oil companies’ shares and other expenses must be considered.
Why Nigerians may still pay more for petrol
One question many Nigerians may ask is: If Nigeria produces crude oil and now has a major refinery, why should higher international oil prices make petrol more expensive?
The answer is that crude oil is the main material used to produce petrol.
When crude oil becomes more expensive worldwide, the cost of producing petrol can also increase.
Even when crude oil is refined within Nigeria, its price is still influenced by what it is worth in the international market.
This means that although the Dangote Refinery has helped Nigeria produce more petrol locally and reduce dependence on imports, it cannot completely shield the country from rising global oil prices.
Local refining can reduce some of the costs involved in bringing petrol into Nigeria, but it does not automatically make petrol cheap.
Therefore, Nigeria can be earning more money from selling crude oil while Nigerians are paying more to buy petrol.
What this means for food, transport and businesses
The impact of rising oil prices does not stop at filling stations.
When petrol becomes more expensive, commercial drivers may increase transport fares to cover their costs.
When transportation becomes more expensive, traders may also spend more money moving food and other goods from farms, factories and markets to buyers.
These additional expenses can eventually lead to higher prices for food, clothing and other everyday items.
Businesses that depend on petrol or diesel generators may also face higher operating costs.
For example, a small business owner who spends more money on fuel to power a generator may have to increase the prices of goods or services to remain profitable.
This is how an increase in international crude oil prices can eventually affect someone who does not own a car or buy petrol directly.
The situation is particularly important at a time when many Nigerian households are already struggling with the cost of living.
According to the National Bureau of Statistics, Nigeria’s inflation rate fell to 14.63 per cent in September 2026, compared with 15.39 per cent in August.
However, lower inflation does not mean that prices have returned to what they used to be. It simply means that prices are generally rising at a slower rate.
If higher fuel costs continue, they could make it harder for Nigerians to feel any relief from the slowdown in inflation.
Can the government stop petrol prices from rising?
The Federal Government has been considering measures to prevent sudden increases in petrol prices.
On October 8, the government disclosed that it was discussing a proposal to keep the cost of supplying petrol to the market at around ₦1,350 per litre.
Under the proposal, petrol suppliers would temporarily bear some additional costs when international prices rise, with the expectation of recovering them when market conditions improve.
This does not mean petrol would be sold to motorists at ₦1,350 per litre, as transportation, distribution and other charges can affect the final pump price.
However, oil marketers have raised concerns about the proposal.
They argue that forcing suppliers to keep prices below their actual costs could create financial problems and affect the availability of petrol.
This leaves the government with a difficult decision: how to protect consumers from expensive fuel without creating more problems for the companies supplying it.
How can Nigerians benefit from higher oil earnings?
Higher oil prices should ideally provide Nigeria with an opportunity to strengthen its economy.
If the government earns more revenue from crude oil exports, the additional money could be used to improve electricity supply, transport infrastructure and other services that affect the cost of living.
For example, more reliable electricity would reduce the amount businesses spend on generators and fuel.
Better roads and transportation systems could also help reduce the cost of moving goods across the country.
The government could also provide targeted support for Nigerians most affected by rising energy costs.
For these benefits to become a reality, there must be proper management of oil revenue and clear information about how additional earnings are spent.
Otherwise, Nigeria could record higher earnings from crude oil without ordinary citizens seeing meaningful improvements in their daily lives.
The real question
The rise in crude oil prices presents both an opportunity and a challenge for Nigeria.
For the government, it could mean more revenue. For oil companies, it could mean stronger earnings.
But for ordinary Nigerians, it could also mean more expensive petrol, higher transport fares and additional pressure on household budgets.
The important question is therefore not just how much Nigeria earns when oil prices rise, but how much of that money is used to make life better for Nigerians.
Because at the end of the day, an oil boom means little to the average Nigerian if the country is earning more while its people are struggling to afford basic necessities.
