The Central Bank of Nigeria (CBN) has issued a significant projection, indicating that the cost of Premium Motor Spirit (PMS), widely known as petrol, could reach approximately N950 per litre by the year 2026. This forecast forms a key part of the bank's macroeconomic outlook for that year and is based on a series of specific economic assumptions.
Basis of the CBN's 2026 Projection
The CBN's 2026 Macroeconomic Outlook is built on several foundational assumptions. The bank anticipates an average global crude oil price of $55 per barrel in 2026. On the currency front, it projects an average exchange rate of N1,451.63 to the US dollar in Q4 2025, strengthening to N1,400 to the dollar in 2026. These currency expectations are tied to predictions of better foreign exchange market efficiency, stronger inflows of capital, and a surplus in the current account.
Furthermore, the outlook assumes that Nigeria's domestic crude oil production will be maintained at around 1.5 million barrels per day throughout the forecast period. Under this combined set of conditions, the CBN models that the retail price for petrol will settle near the N950 per litre mark.
Current Market Context and Dangote's Role
This future projection comes against the backdrop of recent price adjustments in the market. Currently, the Dangote Petroleum Refinery has set its ex-gantry price at N699 per litre. An authorised distributor, MRS Oil, is retailing petrol at N739 per litre at its stations.
These prices followed a reduction by the Dangote refinery in mid-December, where it lowered its ex-gantry rate from N828 to N699. The refinery also enforced a pump price through its partner, MRS. This move reportedly pressured rival fuel stations to lower their own prices to remain competitive and retain customers.
Broader Economic Implications and Warnings
The CBN's report links its fuel price forecast to broader economic trends. It projects that Nigeria's headline inflation will moderate significantly, slowing to 12.94% in 2026 from an estimated 21.26% in 2025. This expected easing is attributed to anticipated lower food prices and reduced PMS costs, driven by increased competition within the midstream oil and gas sector.
The bank emphasised that rising private-sector investment, particularly in domestic refining capacity, will be crucial for supporting economic growth and managing energy costs. It also pointed to improved security around oil assets and expanding refining capacity as factors expected to enhance supply conditions by 2026.
In a related cautionary note, the Dangote Petroleum Refinery has warned that petrol prices could surge to as high as N1,400 per litre if Nigeria reverts to a heavy dependence on imported fuel. The refinery argues that its large-scale local production has been instrumental in stabilising the downstream market and reducing price volatility.
