There is a new economic theory Nigerians may soon have to learn: “Okpebholonomics”;
the curious idea that because something costs more in a richer country after currency
conversion, those paying less for it in naira must automatically be “enjoying.” Sounds
laughable, Isn’t it?
Edo State Governor Monday Okpebholo appeared to offer precisely this kind of
reasoning when he compared petrol prices in Nigeria with those in the United Kingdom
and concluded that Nigerians are “doing very well” because petrol is more expensive in
Britain.
Speaking on Thursday at the “Operation Rescue Benin-Asaba Road” event, Okpebholo
said he had visited a filling station in London and discovered that, after conversion, a
litre of petrol cost more than ₦3,000.
“Let me tell you, after conversion, it’s about N3,000 something to one litre of fuel. We
are doing very well here,” he said.
On the narrow question of arithmetic, the governor has a point. Petrol in the UK is
indeed currently above the equivalent of ₦3,000 per litre. The average UK petrol price
was about £1.74 per litre on September 24, according to available fuel-price data. But
economics is not a primary-school exercise in converting pounds to naira. The important
question is not simply “how much does a litre of petrol cost?” It is: “how much of a
person's income is required to buy that litre, and what does that litre cost the person
indirectly?” That is where the comparison begins to unravel.
In fact, the price tag is not the whole story. A litre of petrol costing ₦1,400 in Nigeria
cannot meaningfully be described as cheaper than a litre costing £1.74 in Britain without
examining incomes. From April 2026, the UK's National Living Wage for workers aged
21 and above is £12.71 an hour. Nigeria's national minimum wage, meanwhile, is
₦70,000 per month. The Nigerian government confirmed the new minimum wage
following the 2024 legislation. That difference matters enormously.
At £1.74 a litre, a UK worker earning £12.71 an hour needs only a small fraction of an
hour's minimum-wage earnings to buy a litre of petrol. A Nigerian worker earning
₦70,000 a month, by contrast, faces a completely different affordability calculation. A
litre at ₦1,400 represents about two per cent of the entire monthly minimum wage. Fill a
50-litre tank and the bill approaches ₦70,000, effectively an entire month's statutory
minimum wage. So, yes, the British motorist may hand over more naira after currency
conversion.
But the Nigerian worker may be surrendering a substantially larger proportion of his or
her income. That is the economic point that a currency converter cannot capture.
Without a doubt, purchasing power is the missing mathematics. This is where the
governor's comparison needs another variable: “purchasing power”. Prices do not exist
in isolation. They exist in relation to incomes. A ₦1,400 bottle of water means
something different to a person earning ₦70,000 a month than it does to someone
earning ₦700,000. The same principle applies to petrol.
The fact that £1.74 converts to more than ₦3,000 does not mean the British consumer
is necessarily under greater fuel-price pressure than the Nigerian consumer. It merely
means the two currencies have different exchange values. Indeed, using exchange
rates to compare living standards without considering income is like comparing the
prices of two houses in Lagos and London simply by converting both into naira and
declaring the cheaper one more affordable. That is not economics. That is arithmetic
without context.
Besides, then comes Nigeria's generator economy which is another major difference
that makes the comparison even less useful. Petrol in Nigeria is not merely a
transportation expense. For millions of households and small businesses, petroleum
products have historically been tied to electricity generation, transportation, logistics and
commercial activity. When electricity supply is unreliable, the cost of fuel becomes part
of the cost of keeping businesses open, preserving food, powering equipment and
providing basic services. That creates a multiplier effect.
When the price of petrol rises, the commercial driver pays more. The transporter pays
more. The farmer moving produce pays more. The trader moving goods to the market
pays more. The small manufacturer running a generator pays more. The consumer
eventually pays for all of them. This is why the Nigerian petrol-price debate cannot be
reduced to what appears on a filling-station sign. The price of fuel finds its way into the
price of food, transportation, production and services.
Recent reporting shows petrol prices around ₦1,400 per litre in Lagos and Abuja, with
variations across locations, while diesel has moved above ₦2,000 per litre. Reuters
reported that renewed fuel-price increases are adding to cost-of-living pressures in
Nigeria.
Therefore, telling Nigerians that they are “enjoying” because somebody in London pays
the equivalent of more than ₦3,000 for petrol misses the larger economic picture.
Unfortunately, Britain is not Nigeria, and that is the point. There is nothing inherently
wrong with comparing Nigeria with Britain. In fact, international comparisons can be
useful. But meaningful comparisons require comparable indicators. What is the average
disposable income? What proportion of income goes into transportation? How much
does electricity cost? How much do households spend on healthcare? What is the cost
of housing? How much does food consume from household income? What public
services does the taxpayer receive? How much private expenditure is required because
public infrastructure is inadequate? These are the questions that determine whether a
price is genuinely affordable.
A Nigerian household that spends heavily on private healthcare, alternative electricity,
transportation and security cannot be assessed against a British household merely by
comparing the price displayed at a petrol station. The issue is not that Britain has cheap
petrol. It does not. The issue is that a high nominal price does not automatically
translate into low affordability, just as a lower nominal price does not automatically mean
affordability.
Perhaps the simplest way to expose the weakness in the comparison is to imagine a
50-litre tank. At ₦1,400 per litre, a Nigerian motorist would need about ₦70,000 to fill it.
That is the equivalent of the entire national minimum wage. At about £1.74 per litre, a
50-litre tank in Britain costs roughly £87. The UK's 2026 National Living Wage is £12.71
per hour.
The figures speak more clearly when placed beside earnings rather than
exchange rates. This is not an argument that British motorists have no financial
pressures. They do. Nor is it an argument that Nigeria must have the same fuel prices
as Britain. It is simply a reminder that affordability is measured against purchasing
power, not currency conversion alone.
In fact, Nigerians need more than a cheaper pump price. There is also a broader lesson
here for the conversation about economic reforms. Government has every right to
defend its economic policies. Supporters of the reforms can point to reforms they
believe will eventually strengthen the economy.
Critics can point to the immediate hardship being experienced by households and businesses. But telling citizens that they are “enjoying” because somebody elsewhere pays more for the same product does not
answer the hardship question.
The Nigerian worker does not buy petrol with pounds. He
buys it with naira earned in a naira economy. He does not pay his landlord in London
pounds. He does not buy food with the British minimum wage. And he certainly cannot
take comfort to the filling station in the knowledge that petrol is more expensive in
London.
The citizen's economic reality is determined by what remains in his pocket after paying
for food, transport, rent, electricity, school fees, healthcare and other necessities. That is
the balance sheet that matters.
In fact, beyond what this writer in this context terminologically calls Okpebholonomics,
Governor Okpebholo's comparison offers an interesting lesson in how statistics can be
technically correct while the conclusion drawn from them can still be misleading. Yes,
petrol in Britain currently costs more than the equivalent of ₦3,000 per litre. Yes,
Nigerian petrol prices are lower in nominal naira terms.
But those facts, standing alone, do not establish that Nigerians are economically better off. The missing variable is
purchasing power. And that is precisely why economic policy should be judged not
merely by the price of a commodity in isolation, but by the relationship between prices,
incomes, productivity, infrastructure and the quality of life they produce.
Without a doubt, Nigeria does not need politicians to find countries where particular
goods are more expensive and present those prices as evidence of prosperity.
Nigerians need an economy in which their earnings can comfortably buy the necessities
of life. That is the real test. Until that happens, ₦1,400 petrol remains ₦1,400 petrol, no
matter how expensive it is in London.
