Global crude oil prices have continued to decline, with Brent, the international benchmark, briefly selling at $70 before rising slightly to $71.57 per barrel on Wednesday, July 2, 2026.
The U.S. West Texas Intermediate (WTI) fell to $68.44 per barrel, according to Oilprice.com. This is considered the lowest level in months.
The primary driver of the falling crude oil prices is the de-escalation of tensions in the Middle East after the United States and Iran reached a ceasefire agreement to end the four-month conflict in the Gulf region, which led to the reopening of the Strait of Hormuz.
This drop, which effectively wipes out the geopolitical risk premiums that built up earlier this year, raises expectations of lower pump prices of fuel in domestic markets such as Nigeria.
However, despite a significant drop in crude oil prices, the retail pump price of Premium Motor Spirit (PMS), commonly known as petrol, is still hovering between N1,195 and N1,200 per litre. This has left consumers and economic analysts questioning the effectiveness of the country’s deregulated market and the local pricing mechanisms.
The global benchmark, Brent crude, retreated to the $70 mark this week amid concerns over global demand and supply chain stabilisation. Historically, a drop in crude prices—the primary input cost for petrol production—has often triggered a rapid adjustment in pump prices in many nations. In Nigeria, however, the correlation between international oil prices and domestic fuel costs has remained largely disconnected for the average motorist.
Fuel Pricing in a Deregulation Regime
Under the current deregulated regime, the Nigerian National Petroleum Company Limited (NNPC) and other oil marketers are ostensibly supposed to reflect the cost of crude in the pump price. However, the official landing cost of petrol, which factors in the global oil price, shipping, and insurance, is estimated to be significantly lower than the ₦1,200 mark observed at filling stations.
Pinnacle Daily observed that the Nigeria National Petroleum Company (NNPC) retail outlets in Lagos and Ogun states are selling between N1,195 and N1,210 per litre.
This is despite the Federal Government’s warning that petrol prices should reflect the current decline in crude oil prices. The Federal Competition and Consumer Protection Council (FCCPC) had on Sunday stated that its preliminary findings show that local refiners, depot owners, and independent marketers are selling at rates that do not reflect the declining crude oil prices and warned they risk sanctions if the ongoing investigations reveal evidence of exploitation.
Also, the Minister of Petroleum Resources (Oil), Heineken Lokpobiri, called on petroleum marketers to reflect the current decline in the cost of crude oil in their domestic pump prices to ease cost pressures on Nigerians.
Those making a case for lower pump prices argue that before the US-Israel-Iran War, which started in late February, petrol was selling between N800 and N900 per litre across the country when crude oil prices hovered between $68 and $72 per barrel.
The pump price of petrol later went as high as N1,500 per litre as crude oil prices jumped to about $120 per barrel during the conflict.
The recent sharp correction in oil prices raised expectations of consumers about a commensurate drop in pump prices.
However, market observers pointed out that despite the drop in crude prices to about $70, local pump prices are unlikely to witness a drastic reduction in the short term.
Analysts say that apart from the high cost of petroleum inventories, other factors behind the stubborn pricing appear to be the recent fluctuations in foreign exchange pressures and the high cost of logistics and refining. With the Naira still struggling to find stability against the dollar, the cost of sourcing the commodity—whether imported or processed by the Dangote Refinery—remains elevated in local currency terms.
The Frustration of Motorists
For commuters and business owners in Lagos, Abuja, Port Harcourt, and other cities across the country, the economic theory behind the pricing is irrelevant. The high energy costs continue to feed into transportation fares and food prices, driving inflation.
”The price of crude is coming down globally, but here we are, still paying through the nose. It doesn’t make sense,” said Adebayo Oyedele, a commercial bus driver in Lagos. “If the price of crude is going down, the price of fuel should go down too, so we can breathe,” he added.
Analysts say that until higher-priced inventories are exhausted, motorists should not expect a significant drop in pump prices anytime soon.
President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, called on the government to engage with marketers to identify steps to take to stabilize fuel prices across the country.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X