The Central Bank of Nigeria (CBN) has projected that the pump price of petrol will hover around N950 per litre in 2026, according to its 2026 Macroeconomic Outlook for Nigeria.
The apex bank’s baseline projections for the domestic economy are anchored on several assumptions, including an average crude oil price of $60 per barrel in the fourth quarter of 2025 and $55 per barrel in 2026.
The outlook also assumes an average Nigerian Foreign Exchange Market rate of ₦1,451.63 to the dollar in Q4 2025 and ₦1,400/$ in 2026, supported by improvements in foreign exchange efficiency, increased capital inflows, a current account surplus and broader economic activity.
Domestic crude oil production is expected to average about 1.5 million barrels per day throughout the forecast period, while the price of premium motor spirit is projected to settle at around ₦950 per litre, higher than prevailing pump prices.
According to the bank, “The baseline projections are predicated on the following assumptions: crude oil price at an average of $60/barrel in Q4 2025 and $55/barrel in 2026 (consistent with the US EIA’s outlook that rising global crude oil inventories and supply glut would moderate prices); NFEM exchange rate at an average of N1,451.63/$ in Q4 2025 and N1,400/$ in 2026 (supported by a more efficient FX market, higher capital inflows, a current account surplus, and a broad-based improvement in economic activity).
“Furthermore, domestic crude oil production is assumed at about 1.5 mbpd (excluding condensates) throughout the forecast period. PMS price is expected to hover around N950 per litre in 2026. Government expenditure is projected to follow the 2025-2027 MTEF/FSP path, reflecting an expansionary fiscal stance aimed at supporting the $1tn economy initiative. MPR and CRR are assumed at 27.00 and 45.00 per cent, respectively. The baseline projections were generally supported by the assumption of continued improvement in business optimism and stronger investor sentiment,” the CBN said.
Petrol prices had hovered around ₦900 per litre and above before the Dangote refinery slashed gantry rates from ₦828 to ₦699 per litre in December. Following the reduction, the refinery implemented a retail price of ₦739 per litre through its partner, MRS Oil.
As MRS filling stations began selling petrol at ₦739 per litre in mid-December, other marketers adjusted their prices downward to remain competitive.
Since commencing operations in 2024, the Dangote refinery has repeatedly reduced petrol prices, although industry players note that the price cuts come at significant cost to both the refinery and fuel importers.
Earlier this week, the refinery cautioned that petrol prices could climb as high as ₦1,400 per litre if Nigeria depends solely on fuel imports, describing large-scale domestic refining as a stabilising factor in the downstream market.
In a statement, the refinery said, “Recent price movements further highlight an uncomfortable reality. In the absence of the Dangote Petroleum Refinery, fuel importers would continue to operate without restraint, with petrol prices potentially escalating to levels estimated at up to N1,400 per litre in a post-subsidy environment. The refinery’s operations have therefore served as a critical stabilising force in the downstream petroleum market.”
The CBN also noted that increased private sector investments, particularly in refining, are expected to strengthen economic growth prospects in 2026.
It stated, “Increased crude oil production, underpinned by improved security around oil assets, especially with the launch of the production monitoring command centre and expansion of domestic crude oil refining, and stable energy prices are expected to drive growth further in 2026.”
However, the bank projected that petrol prices may ease over time due to rising competition among midstream operators. It also forecast that headline inflation would decline to 12.94 per cent in 2026, from an estimated 21.26 per cent in 2025.
“The anticipated moderation would be driven by declining food and PMS prices. The expected deceleration in PMS prices would be driven by the increasing competition within the midstream segment of the oil industry,” it said.
On the global front, the CBN projected a 5.52 per cent moderation in commodity prices in 2026, attributed to weaker demand and improved supply conditions.
Global energy prices are also expected to drop by 6.99 per cent next year, largely on the back of lower oil prices, with Brent crude projected to average about $61 per barrel in 2026.
The bank added that metal prices, excluding precious metals, could fall by 3.29 per cent in 2026, while agricultural commodity prices are forecast to decline by 3.18 per cent, reflecting soft demand and easing supply pressures in major food markets.
(PUNCH)
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