Summary
This technical report discusses the evolving gasoline pricing in Nigeria, focusing on the liberalization of the market and its implications for competition and pricing alignment with international standards. It outlines the historical misalignment of gasoline pricing in Nigeria with global benchmarks, particularly the use of the EBOB price reference, which has been the standard for European wholesale trade. The report details how the current pricing mechanism has led to inefficiencies, with the premium unleaded price often exceeding the EBOB price, resulting in inflated subsidy calculations. The document presents a straightforward remedy to this issue, suggesting that Nigerian buyers adopt EBOB as the pricing benchmark to ensure fair competition with imports and regional refiners. By aligning with EBOB, stakeholders can better manage risks associated with price volatility and enhance market efficiency. The report emphasizes the importance of this correction in the context of ongoing debates about fuel subsidies in Nigeria.
