MEMAN says soaring petrol, diesel and cooking gas prices reduced consumption in H1 2026 as households and businesses adjusted to rising energy costs

Nigeria’s downstream petroleum market felt the full impact of Nigerian Fuel Prices during the first half of 2026, as rising pump prices forced households and businesses to cut consumption of petrol, diesel and cooking gas while the industry warned against relying solely on domestic refining.

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An analysis of the H1 2026 Downstream Industry Analysis Report released by the Major Energy Marketers Association of Nigeria (MEMAN) showed that higher retail prices across the country’s three major petroleum products consistently coincided with weaker demand, reflecting growing pressure on household incomes, transportation costs and business operations.

The findings, released in Abuja, underscore how the deregulated downstream market is reshaping consumer behaviour as Nigerians become increasingly sensitive to fluctuations in energy prices.

According to MEMAN, the average retail price of Premium Motor Spirit, commonly known as petrol, climbed from ₦1,035 per litre in January to ₦1,051 in February before surging to ₦1,289 in March.

Prices rose further to ₦1,533 in April and reached a peak of ₦1,596 in May before easing to ₦1,300 in June.

Consumption moved in the opposite direction throughout the period.

Average daily petrol consumption fell from about 60 to 61 million litres in January to roughly 58 million litres in February.

Demand then dropped sharply to around 48 million litres in March, recovered modestly to about 51 million litres in April, slipped again to between 46 and 47 million litres in May and edged back to approximately 48 million litres in June after pump prices moderated.

Diesel followed a similar pattern.

Automotive Gas Oil sold for an average of ₦1,362 per litre in January, rising to ₦1,420 in February and ₦1,648 in March. Prices then jumped dramatically to ₦2,475 in April before reaching ₦3,277 in May.

Although the average price eased to ₦2,900 in June, it remained significantly above levels recorded at the start of the year.

Daily diesel consumption averaged about 19.5 million litres in January and around 20 million litres in February before falling to between 15.5 million and 16 million litres in March.

Consumption recovered slightly to roughly 17.5 million litres in April before settling at about 16 million litres in both May and June.

Liquefied Petroleum Gas, widely used for household cooking, also recorded weaker demand.

Average LPG prices increased steadily from ₦1,086 per kilogramme in January to ₦1,360 in February, ₦1,572 in March, ₦1,791 in April and ₦1,800 in May before easing to ₦1,661 in June.

Consumption fell from nearly five kilotonnes per day in January to around 4.3 to 4.4 kilotonnes in February.

Although demand briefly recovered above five kilotonnes in March, it declined consistently thereafter, reaching approximately 4.2 kilotonnes daily by June.

MEMAN attributed much of the price pressure to higher international crude oil prices fuelled by geopolitical tensions in the Middle East and disruptions to shipping through the Strait of Hormuz.

While global crude prices softened in June, the association noted they remained above levels recorded at the beginning of the year.

The report concluded that Nigerian consumers had become markedly more price-sensitive, with rising fuel costs translating directly into lower consumption across petrol, diesel and cooking gas.

Beyond the consumption trends, MEMAN used the report to highlight what it described as a critical next phase for the country’s downstream petroleum industry.

“The Nigerian downstream petroleum sector enters the second half of 2026 at a defining moment.

The structural transition from an import-dependent market to one supported by significantly expanded domestic refining capacity has largely been achieved,” the association said.

“The focus now shifts from increasing refining output to building a competitive, transparent, and resilient downstream market capable of sustaining long-term growth and energy security.”

The report also weighed into the ongoing debate over fuel imports, arguing that local refining alone should not be expected to guarantee Nigeria’s energy security.

Although the commencement of large-scale production at the Dangote Refinery has significantly reduced dependence on imported refined products, MEMAN maintained that imports should continue to complement domestic supply.

“Although domestic refining has significantly reduced Nigeria’s reliance on imported petroleum products, imports will continue to play a complementary role in ensuring supply diversity and sustaining competitive market conditions,” the association stated.

The position contrasts with calls by Dangote Refinery for restrictions on fuel imports where sufficient local production exists.

However, the Federal Government has consistently argued that retaining the power to issue import licences is necessary to maintain strategic fuel reserves, prevent shortages, encourage competition and reduce the risks associated with market concentration.

MEMAN further warned against allowing Nigeria’s long-term fuel supply to depend on a single refinery, urging the establishment of a National Strategic Stock capable of cushioning refinery shutdowns, logistics disruptions and geopolitical shocks.

The recommendation builds on reforms introduced after the removal of petrol subsidies and the liberalisation of the downstream market, policies that have encouraged investment in domestic refining but have also exposed consumers more directly to movements in international oil prices and foreign exchange costs.

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Looking ahead, MEMAN expects the second half of 2026 to be characterised by market consolidation, stronger regulatory oversight and a continued effort to balance domestic refining with strategic imports in pursuit of long-term energy security.