As countries around the world adopt fuel subsidies and other palliative measures to cushion the impact of the US-Iran war and the closure of the Strait of Hormuz, Nigerians have continued to bear the brunt of rising petrol and diesel prices, even as energy economists and industry stakeholders call for targeted interventions to ease the pressure on households and businesses.

The International Energy Agency disclosed that more than 115 countries had introduced measures to respond to the energy shock, including energy conservation, price support and structural policies aimed at reducing fuel consumption.

Of these, 94 governments had introduced price-support measures, including fuel subsidies, price caps and tax interventions, while 58 had adopted energy conservation measures and 30 had announced longer-term structural policies to reduce fuel use.

The measures came as the disruption of energy flows through the Strait of Hormuz, one of the world’s most important oil and gas shipping routes, sent shock waves through global energy markets.

For Nigeria, the impact has been felt through higher petrol prices, with pump prices rising above N1,300/litre in parts of the country before subsiding to N1,200, while the increase in energy costs has also pushed up transportation, food and business operating costs.

The IEA’s head of analysis for its Office of Energy Efficiency and Inclusive Transitions, Jérôme Bilodeau, said demand-side measures could not replace the enormous volume of energy normally transported through the Strait of Hormuz but could moderate the impact of the disruption.

“Demand-side measures are not enough to replace the sheer size of energy that’s transiting through that strait, but it can dampen and moderate the impact,” Bilodeau said during a webinar hosted by the Centre for Strategic and International Studies.

He said 58 governments had introduced energy conservation measures since the war began, mainly targeting oil consumption through reduced private transportation fuel use, working or studying from home, reduced government travel and adjustments to cooling temperature settings.

Bilodeau, speaking at a webinar reported by S&P Global Energy, said 94 governments had also introduced price supports such as fuel subsidies, price caps and tax measures.

Japan and South Korea, he said, had introduced price caps and fuel subsidies, while Vietnam lowered taxes on electric vehicles and India was promoting electric stoves.

The IEA official said 30 governments had also announced structural policies to reduce fuel consumption over the longer term, including energy efficiency programmes, electrification plans and renewable energy incentives.

In Nigeria, however, energy economists and industry groups have called for targeted measures to cushion consumers from the impact of the energy shock.

A former President of the Nigerian Association of Energy Economics, Prof Adeola Adenikinju, urged the Federal Government to use part of the additional revenue generated from higher crude prices to support vulnerable Nigerians.

“This is the time that Nigeria should say, ‘Look, we are sending some cash to those poor people who are vulnerable,’” Adenikinju said.

He said rising petrol prices had increased transportation costs and worsened inflation, stressing that support should extend beyond civil servants to Nigerians in the informal and private sectors.

The Petroleum Products Retail Outlets Owners Association of Nigeria also urged the government to deploy measures to reduce transportation costs and prevent higher fuel prices from worsening food inflation.

PETROAN National President, Billy Gillis-Harry, said the government should return some of the gains from higher crude prices to Nigerians.

The Independent Petroleum Marketers Association of Nigeria also called for a reduction in taxes and charges imposed on petroleum products, arguing that this would help moderate pump prices.

IPMAN spokesman, Chinedu Ukadike, said charges imposed by agencies including the Nigerian Maritime Administration and Safety Agency, Nigerian Ports Authority and Nigerian Midstream and Downstream Petroleum Regulatory Authority should be reviewed.

“The government should cut down some of these taxes, especially the NIMASA taxes and the rest of them. It will help in bringing down the price of petroleum products,” he said.

He also called for the rehabilitation of petroleum pipelines to reduce the cost of transporting petroleum products by road, as well as the acceleration of CNG vehicle conversion.

The Lagos Chamber of Commerce and Industry similarly urged the government to take advantage of the crisis to strengthen domestic refining and accelerate the shift towards alternative fuels.

The Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf, called for fiscal incentives for domestic refiners and greater investment in mass transportation.

But the Federal Government rejected the calls, thereby leaving Nigerians to grapple with petrol, which was an average of N830 in February before the Middle East crisis escalated.

At the height of the crisis, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the government would maintain its market-driven approach, describing the removal of subsidy as irreversible.

“We will not bring back the fuel subsidy because it creates distortions for the economy, and we won’t introduce price control because we believe in the market,” Oyedele said.

Before the removal of the subsidy by President Bola Tinubu in May 2023, petrol sold for about N200 per litre. The price immediately jumped above N500 after the President declared in his inaugural address that “the fuel subsidy is gone”.

The price subsequently rose to about N1,200 per litre in 2024 before interventions by the Dangote Petroleum Refinery helped bring petrol prices down to an average of about N800/litre.

Despite the pressure from stakeholders, the Federal Government maintained that returning to subsidy or imposing price controls would undermine the reforms it had introduced in the petroleum sector.

Oyedele said the government considered market-based pricing necessary to attract investment and maintain macroeconomic stability. However, he stressed that the government would continue to regulate the downstream market to protect consumers.

“There would be regulation in place to ensure fuel suppliers and marketers do not extort Nigerian consumers,” he said.

The minister also argued that the geopolitical crisis could present an opportunity for Nigeria rather than simply expose the country to higher energy costs. “The situation in Iran presents new opportunities for us as the world looks to diversify sources of energy and invest in new markets,” he said.

Oyedele said Nigeria had recorded strong economic expansion in dollar terms, adding that the country remained committed to its ambition of building a $1tn economy by 2030.

Meanwhile, the global response has gone beyond immediate fuel-price interventions as the IEA said heat pump sales in the first quarter of 2026 rose by 22 per cent in France, 34 per cent in Germany and 20 per cent in Poland compared with the corresponding period in 2025.

Electric car sales reportedly increased by 65 per cent in India, 150 per cent in South Korea and 80 per cent in Southeast Asia during the same period. The agency said Japan had also introduced subsidies for electricity and natural gas, while India capped industrial gas usage.

The policy responses have coincided with weaker global liquids demand. S&P Global Energy CERA’s August Short-Term Outlook showed that global liquids demand fell to 99.2 million barrels per day in May 2026 from 105.1 million bpd in May 2025.