- The National Insights presents to you the top 10 African countries with the cheapest fuel (gasoline) prices in December 2024.
- Libya, Angola, Algeria, and Nigeria are among the countries with the cheapest fuel prices in Africa and the entire world.
- Fuel prices vary depending on various factors, including whether a country is producing oil, government policies, subsidies, and taxes, affecting different countries.
Africa is a continent with some of the largest oil-producing countries in the world, making fuel prices, such as super petrol, cheaper than in the developed economies like the United Kingdom. Despite the rich oil reserves on the continent, the community impact is the least, as some of these projects do not benefit them directly due to poor government support policies.
As of November 25, 2024, the average price of gasoline, Octane-95 (Super Petrol), around the world was USD$1.24 per liter. Iran has the cheapest fuel prices; this includes both the super petrol and diesel. In Africa, Libya has the cheapest fuel prices and the second-cheapest in the world, costing USD$0.031 per liter, according to the monthly review data by Global Petrol Prices.
Countries such as Libya, Angola, and Nigeria are major global oil producers with substantial reserves. This allows them to produce fuel domestically, subsequently leading to lower costs. Nigeria faces economic challenges, occasioned by inept governance and poor economic policies, but is still one of Africa’s largest oil producers, enabling it to maintain relatively low prices at around Nigerian Naira (USD$0.704) per liter.
In contrast, countries like Kenya, Senegal, Zimbabwe, Malawi, and Mauritius have the most expensive fuel prices because they are not significant oil producers. They rely on imports for their fuel needs, which increase the costs due to international market prices and transportation expenses.
Factors such as government policies and subsidies weigh a substantial effect on fuel prices across different countries in Africa. Egyptian petrol prices, despite being among the cheapest in the world, are supported by a mix of domestic production and subsidies. Angola is an oil-producing country, but it also benefits from subsidies that allow it to sell petrol at approximately USD$0.329 per liter.
Kenya, for instance, removed the fuel subsidies following a regime change in 2022. Since then, Kenya has been grappling with high fuel prices, even worsened by the derailing of the strength of the Kenyan shilling against the US dollar. Additionally, Kenya’s government doubled the VAT on petroleum products from 8% to 16% following the enactment of the finance bill 2023.
Kenya has up to nine taxes and levies on petroleum products, including the Value Added Tax (VAT), currently set at 16%; excise duty; road maintenance levy; petroleum development levy (PDL); import declaration fee; railway development levy; anti-adulteration levy; merchant shipping levy; and petroleum regulatory levy. These are amounting to approximately 40% of the price of super petrol, 36% for diesel, and 34% for kerosene.
