Nigeria’s oil production, effects on the economy for 2025
Caleb Ohaeri
Nigeria, which is a major powerhouse in Africa and sets herself as one of the major oil-producing countries is also one of the eleven members of Oil Producing Exporting Countries(OPEC) formed in 1960 to regulate the production and supply of crude oil in the international oil market. Nigeria is Africa’s largest oil producer, and the 16th-largest in the world.
According to the latest S&P Global Commodity Insights estimates, Africa’s largest oil producer has pumped at an average of 1.5 million b/d so far this year, having seen crude output fall below its estimated 2.2 million b/d capacity due to theft, under-investment and technical issues staging fields.
The Bola Ahmed Tinubu administration, which came into power in May 2023 and rolled out the removal of fuel subsidy within the first week of office, also announced that the funds would rather be redirected to invest in public infrastructure, education, health care, and jobs.
Has faced increasing pressure from trade unions and citizens of Nigeria due to the economic downside and crushing effects of the policy. Fuel subsidy removal has led to an increase in the price of essential goods and services. As a result, there would be less disposable income in the hands of individuals and small businesses due to rising prices, stagnant wages, and a fixed national minimum wage which automatically affects the standard of living of the average Nigerian.
The removal of the subsidy led to a surge in petrol prices, with prices rising from around N198 to N500 by the evening of May 29, 2023. In 2025 a litre of fuel currently sells for about 970₦ to as much as 1000₦ In some parts of the country.
Higher inflation, reaching 32.7% by September, increased cost of transportation, increased cost of commodities, making essential items unaffordable for millions of people
Increase in food prices, with as many as 40 million Nigerians being at risk of food insecurity.
With the commencement of the Dangote Refinery and the Port Harcourt Refinery. The cost of importation of refined oil products will be severely impacted. The massive cost of living crisis has plagued the nation and also led to a reduction in the standard of living amongst middle and lower-income earners.
With the sanctions of the US on Russia, which are having a gripping effect on the world energy markets, and the rise of BRICS and a multipolar world order, most countries are going to position themselves in the emerging new world order. We wonder what the future holds for Nigerians.
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