Nigerian motorists may face another round of petrol price hike as international crude oil prices surge above $100 per barrel, amid deepening tensions in the Middle East.
The sharp rise in global oil prices is putting renewed pressure on Nigeria’s downstream petroleum market, where petrol prices are increasingly influenced by crude acquisition costs, foreign exchange movements, freight and other market fundamentals.
International crude benchmark, Brent, rose to $107 on Thursday, from $97 per barrel sold on Wednesday. The United States’ West Texas Intermediate (WTI) rose to $101.7, while Murban Crude soared to $116 per barrel on Thursday, according to Oilprice.com data.
Nigeria’s Bonny Light also rose above $100 per barrel from over $95 sold previously.
The latest oil price rally has been triggered by escalating geopolitical tensions and disruptions to oil shipments, especially in the Strait of Hormuz, raising fears that prolonged instability in the Middle East could further tighten global crude supplies.
For Nigeria, the development presents a fresh challenge to efforts to maintain relatively stable petrol prices following the removal of fuel subsidy.
Pump prices of Premium Motor Spirit (petrol) rose last to between ₦1300 and ₦1,400 per litre following the adjustment of ex-depot price by Dangote Refinery and depot owners.
The 700,000 barrels per day facility adjusted its petrol gantry price about three times in one week from ₦1,165 to ₦1,265 per litre in response to price volatility in the global crude oil market.
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Oil marketers are already warning that sustained increases in international crude prices could force them to review pump prices as replacement costs rise.
The development is particularly significant because higher crude prices can affect both imported petroleum products and locally refined fuel. Although increased domestic refining capacity has reduced Nigeria’s dependence on imported petrol, industry analysts believe that local refiners still face internationally determined crude costs.
The Dangote Petroleum Refinery has emerged as a major supplier to the domestic market, while other local refiners are also seeking greater access to crude feedstock. Any sustained increase in crude prices could therefore raise the cost of production across the refining chain.
Beyond the pump, another major concern is the potential inflationary impact.
A rise in petrol prices could translate into higher transportation and logistics costs, adding pressure to food prices and operating expenses for businesses already struggling with elevated energy costs.
The latest crude rally is therefore testing whether Nigeria’s emerging domestic refining capacity can provide consumers with meaningful protection from international oil-price shocks.
While increased local refining should reduce exposure to imported-product costs, it does not completely insulate the market from global crude-price movements.
With Brent now around $107 per barrel, the immediate concern for consumers and businesses is whether the Middle East crisis will persist long enough to trigger another significant adjustment in the Nigerian fuel market.
If crude prices remain above the $100 threshold or climb towards $110, pressure on marketers to review petrol prices is likely to intensify, potentially opening another difficult chapter for Nigerian consumers.
In an interview last week, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Nwadike, said marketers were considering reviewing pump prices when new products arrive at their retail outlets.
“Once the new products begin arriving, marketers are expected to respond quickly by reviewing their prices and updating their product offerings,” Ukadike stated in an interview with the News Agency of Nigeria in Abuja
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