N70,000 minimum wage makes N1,300 petrol unaffordable, says Oyelaran-Oyeyinka

An economist and former Special Adviser to the President of the African Development Bank on industrialisation, Banji Oyelaran-Oyeyinka, has explained why petrol priced at about N1,300 per litre remains out of reach for millions of Nigerians earning the N70,000 minimum wage.

In a statement released on Saturday, Oyelaran-Oyeyinka cautioned against comparing Nigeria’s fuel prices with those of other countries through direct currency conversion, describing the practice as economically misleading.

“When you do a direct conversion of this naira to dollars or pounds, you generate an economic fallacy; it confuses and misleads folks,” he said.

According to him, Nigeria’s distorted economic structure—characterised by low wages, rising inflation and weak purchasing power—makes petrol expensive for the average citizen, regardless of how it appears when converted into foreign currencies.

He stressed that fuel pricing cannot be assessed in isolation, as some analysts suggest, noting that affordability is fundamentally tied to income levels and broader economic realities.

“The price per litre in Nigeria of N1,300 is just one variable in a complex set of development equations,” he said. “In low-income economies where many operate at subsistence levels, petrol effectively becomes a luxury item.”

Oyelaran-Oyeyinka further argued that purchasing power parity (PPP) offers a more realistic benchmark for measuring affordability than nominal exchange rate comparisons.

“Purchasing power parity is made clearer not by direct currency conversion, but by how long a worker must labour to earn a given sum,” he explained. “Low nominal petrol prices in Nigeria do not translate to affordability.”

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His comments come amid a fresh surge in fuel prices across the country. Reports indicate that petrol prices have climbed by more than 50 per cent in recent weeks, rising to between N1,361 and N1,380 per litre in Abuja, up from earlier prices ranging between N875 and N900.

The increase followed successive upward reviews by Dangote Refinery, which raised its gantry price to about N1,200 per litre in March, triggering higher pump prices nationwide.

With the national minimum wage standing at N70,000, economists warn that sustained increases in fuel prices could further erode household incomes, deepen inflationary pressures and worsen living conditions for low- and middle-income earners.