The Trade Union Congress of Nigeria (TUC) has warned that the price of Premium Motor Spirit (PMS), commonly known as petrol, could rise to as high as N2,000 per litre if current economic pressures persist.
The union also proposed a new subsidy framework aimed at strengthening local refining capacity as a way to cushion Nigerians against rising fuel costs.
Rising Global Oil Pressures and Exchange Rate Impact
Speaking during a press briefing in Abuja on Thursday, TUC President Festus Osifo said Nigeria’s fuel pricing trajectory is being shaped by global and domestic economic shocks.
He explained that volatility in global crude oil markets, partly driven by geopolitical tensions involving the United States, Israel, and Iran, has disrupted supply expectations and pushed crude prices higher.
According to him, this has a direct effect on domestic fuel pricing, especially in a deregulated market environment.
Naira Depreciation Worsening Fuel Costs
Osifo also linked rising petrol prices to the continued depreciation of the naira, noting that exchange rate instability significantly increases the cost of imported energy inputs and transportation.
He warned that the combined effect of currency weakness and global oil price fluctuations is intensifying inflationary pressure and reducing the purchasing power of Nigerian workers.
Proposal for Local Refining-Backed Subsidy Model
To address the escalating cost burden, the TUC proposed a targeted subsidy mechanism focused on supporting domestic refining operations.
Osifo suggested that when global oil prices exceed the 2024 budget benchmark of $64.85 per barrel, excess crude revenue should be redirected to stabilise local fuel supply.
He explained that about 60 percent of the windfall revenue typically shared among the federal, state, and local governments should instead be channelled into supporting domestic refineries.
This includes major facilities such as the Dangote Refinery as well as modular refineries operating across the country.
Aim to Stabilise Domestic Fuel Prices
According to the labour union, the proposed model is intended to reduce Nigeria’s exposure to global oil shocks while strengthening domestic energy production capacity.
By cushioning local refiners, the TUC believes Nigeria can achieve more stable fuel pricing and reduce the likelihood of sudden pump price increases.
