Outlook hinges on oil price at $55, exchange rate stability, and local refining growth
The Central Bank of Nigeria (CBN) has projected that the price of Premium Motor Spirit (PMS), commonly known as petrol, could rise to about N950 per litre in 2026, based on key assumptions around crude oil prices, exchange rate performance, and domestic production levels.
This projection is contained in the apex bank’s 2026 Macroeconomic Outlook, where it outlined the conditions under which fuel prices are expected to stabilise despite ongoing market reforms.
Currently, the Dangote Petroleum Refinery sells petrol at a gantry price of N699 per litre, while pump prices at MRS Oil, its authorised distributor, stand at N739 per litre.
According to the CBN, its forecast is anchored on an assumed average crude oil price of $55 per barrel in 2026, alongside an exchange rate of N1,451.63 per dollar in the fourth quarter of 2025, moderating to N1,400 per dollar in 2026. The bank said this outlook is supported by improved efficiency in the foreign exchange market, stronger capital inflows, and a sustained current account surplus.
The apex bank also assumed domestic crude oil production of about 1.5 million barrels per day throughout the forecast period.
Under these combined conditions, the CBN expects PMS prices to hover around N950 per litre in 2026, noting that increased private-sector investment, particularly in local refining will play a critical role in supporting economic growth and containing energy costs.
The bank further stated that higher crude output, improved security around oil infrastructure, and expanding refining capacity are expected to improve fuel supply conditions in 2026.
On inflation, the CBN projected that headline inflation will ease to 12.94 per cent in 2026, down from an estimated 21.26 per cent in 2025. It attributed the expected slowdown to declining food prices and moderating PMS costs, driven largely by increased competition in the midstream segment of the petroleum sector.
Industry data also show that fuel prices have recently moderated. Before December, Petroleumprice.ng reported that petrol sold at N900 per litre or more in many parts of the country. Prices declined after the Dangote Refinery reduced its ex-gantry price from N828 to N699 per litre.
Following the price cut, the refinery implemented a N739 per litre pump price through MRS Oil. Once MRS outlets adopted the new pricing in mid-December, competing filling stations were forced to lower their prices to retain customers.
Despite the recent relief, Dangote Refinery has cautioned that petrol prices could surge to as high as N1,400 per litre if Nigeria returns to heavy dependence on imported fuel. The refinery warned that large-scale domestic production remains critical to stabilising the downstream market and limiting price volatility.
About the Author
