Nigerians reduced their consumption of petrol in the first half of 2026, cutting average daily usage by 22.3 per cent as pump prices climbed sharply on the back of global market shocks, according to the latest half-year downstream industry report by the Major Energies Marketers Association of Nigeria (MEMAN).
The report, which covers the period from January to June 2026, showed that the surge in the price of Premium Motor Spirit (PMS), commonly known as petrol, forced many households and businesses to cut back on fuel usage, in what analysts described as a clear demonstration of consumer demand elasticity in a newly deregulated market.
According to the report, the average pump price of petrol rose from about N1,035 per litre in January to as high as N1,596 per litre in May, before easing slightly to around N1,300 per litre by June.
When measured against import parity benchmarks, which ranged from a low of N684.90 per litre to a high of N1,362.55 per litre within the same period, prices nearly doubled at their peak.
MEMAN stated that the price increases were driven largely by external factors, particularly the escalation of the Middle East conflict, which began on 28 February 2026 and led to the temporary closure of the Strait of Hormuz, one of the world’s most important routes for oil and refined product shipments.
The association explained that the closure forced oil tankers to reroute around the Cape of Good Hope, turning what would ordinarily be an 18-day voyage into a journey of nearly 40 days.
This, it said, pushed up freight and insurance costs globally, with the effects passed down to consumers in import-dependent economies, including Nigeria.
“Data from the height of the crisis revealed that Nigeria recorded a 39.5 per cent gasoline price surge, the sharpest increase across Africa, more than doubling the price jumps seen in regional peers like Egypt, which recorded 14.3 per cent,” the report stated.
Consumption falls as prices bite
The report noted that as pump prices climbed, consumption dropped correspondingly. Average daily PMS consumption fell from about 60 million litres per day in January to a low of roughly 46 million litres per day in May, before recovering marginally to about 47 million litres per day by June.
MEMAN said the pattern showed that Nigerian consumers responded rationally to the price shocks by cutting down on fuel use, a trend it described as “strong consumer demand elasticity”.
Diesel, known as Automotive Gas Oil (AGO), followed a similar pattern, with average daily consumption dropping by 17.5 per cent over the same period. The report showed that diesel pump prices rose from about N1,362 per litre in January to a peak of N3,277 per litre in May, before falling back to around N2,900 per litre in June.
Cooking gas, or Liquefied Petroleum Gas (LPG), was not spared either. According to the report, LPG prices rose from N1,086 per kilogramme in January to N1,800 per kilogramme in May, with consumption falling from about 4.9 kilotonnes per day to roughly 4.0 kilotonnes per day by June.
Despite the price pressures, the report credited the expansion of local refining capacity, particularly the scale-up of the Dangote Petroleum Refinery, with helping to cushion Nigerians from what could have been a far more severe supply crisis.
MEMAN disclosed that domestic refineries supplied an average of about 79 per cent of total PMS available in the market during the review period, with the Dangote Refinery’s PMS supply share rising from 38.9 per cent in 2025 to 81.7 per cent by the end of H1 2026.
The Dangote Refinery was said to have exceeded 100 per cent operational efficiency in May 2026, operating above its nameplate capacity, while Waltersmith Refinery doubled its capacity from 5,000 to 10,000 barrels per day in April 2026.
However, the report cautioned that domestic production alone was still not sufficient to fully meet national demand, particularly between February and April, when national consumption outpaced domestic refinery output. This, it said, prompted the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to issue import licences to selected marketers to avert stockouts.
NMDPRA reportedly issued Q1 PMS import licences to six marketers in March 2026, approving a total import volume of 180,000 metric tonnes. By May 2026, the volume had been increased to 720,000 metric tonnes under the Q2 licensing round.
Stock levels dropped below safety threshold
The report further disclosed that the pressure on supply caused Nigeria’s PMS stock sufficiency to fall from 33 days in January to a low of just 16 days by May, well below the statutory 30-day safety benchmark stipulated by regulation. Stock levels recovered slightly to about 20 days in June as licensed imports began to filter into the market.
MEMAN said the experience underscored the need for Nigeria to establish a National Strategic Stock, describing it as critical to cushioning the country against future supply shocks arising from geopolitical conflicts, shipping disruptions or refinery outages.
Citing Section 181 of the Petroleum Industry Act (PIA), the report noted that the law already empowers the NMDPRA to “establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products,” and called for this provision to be more actively implemented.
Nigeria still cheaper than West African peers
Notwithstanding the price increases recorded locally, the report showed that Nigeria’s pump prices remained relatively moderate when compared with other West African countries. Nigeria’s average petrol pump price of N1,148.51 per litre for the period was said to be the lowest in the region, compared with Senegal at N2,247.35 per litre and Sierra Leone at N2,200.53 per litre.
MEMAN attributed the moderation, in part, to the growing role of domestic refining, which it said reduced Nigeria’s exposure to the kind of extreme freight and import cost pressures faced by countries that remained largely dependent on imported refined products.
Outlook for H2 2026
Looking ahead, MEMAN said the second half of 2026 would likely be a period of market consolidation rather than further structural change, with regulatory attention shifting towards strengthening market institutions, deepening the National Strategic Stock framework, and maintaining a balance between domestic refining and complementary imports.
The association also pointed to the proposed Initial Public Offering (IPO) of the Dangote Refinery as a development to watch in the second half of the year, noting that it was expected to improve corporate disclosure and strengthen investor confidence in the downstream sector.
“Success will depend on maintaining a balanced supply framework built on efficient domestic refining, complementary imports, strategic petroleum stocks, and effective regulation,” the report stated, adding that if these elements were properly aligned, Nigeria would be well positioned to strengthen its energy security and establish itself as a leading downstream petroleum market in Africa.
