Petrol prices in Nigeria have surged by nearly 30% since late January, driven first by domestic refinery price adjustments and later by a sharp rise in global crude oil following the conflict in the Middle East.
Retail pump prices that averaged about ₦835 per litre in January at stations operated by Nigerian National Petroleum Company Limited and some independent marketers have climbed steadily in recent weeks, reaching around ₦1,085 per litre nationwide on Monday.
The increase began before the current war by the United States and Israel on Iran intensified but has accelerated as crude oil prices climbed sharply on fears of supply disruptions.
In January, Dangote Petroleum Refinery, the country’s largest fuel supplier, raised its depot (wholesale) petrol price to about ₦799 per litre, reversing a festive-season discount that had temporarily reduced the price to ₦699 per litre.
Under the adjustment, petrol sold through partner outlets such as MRS Oil Nigeria rose to roughly ₦839 per litre, while other stations, including NNPC outlets, priced fuel around ₦875 per litre.
Prices rose further in early March when the refinery increased its wholesale rate again, lifting it from ₦774 to ₦874 per litre. The adjustment quickly filtered through the retail market, with NNPC stations in Abuja raising pump prices to about ₦960 per litre while independent marketers sold between ₦950 and ₦980 per litre in several cities.
The refinery later raised the wholesale price again to ₦995 per litre on Friday, reflecting what officials described as shifts in global oil market fundamentals and rising logistics costs.
The increase marked a jump of about ₦221 within a few days, underscoring the volatility of Nigeria’s fuel market since the removal of government subsidies and the transition to a deregulated pricing system.
Global Disruption
While domestic pricing changes initially drove the increases, global oil markets have since intensified the pressure.
International benchmark Brent crude has surged in recent weeks as conflict involving the United States, Israel and Iran raised fears of disruptions to oil shipments from the Middle East.
The refinery said the conflict had pushed global crude and freight costs sharply higher, noting that Brent prices had risen more than 25% within a short period.
Industry analysts warn the upward trend may continue if geopolitical tensions persist. JPMorgan Chase has projected that crude oil could climb to around $120 per barrel if supply disruptions intensify.
Higher crude prices typically translate directly into more expensive refined fuel, especially in Nigeria’s deregulated market where petrol prices are closely linked to international benchmarks and foreign exchange costs.
Economist Paul Alaje of SPM Professionals said earlier that rising crude prices would inevitably drive up the cost of petroleum products.
“As crude oil goes up, the cost of PMS, diesel and aviation fuel will follow,” he said, using the name commonly used in local media in referring to petrol.
For Nigeria, the oil rally presents a mixed picture. Higher crude prices could boost government revenues and foreign exchange earnings, but rising petrol prices threaten to deepen inflation and increase transport and food costs for households already grappling with economic pressures.
The latest increase to around ₦1,085 per litre suggests the fuel market remains highly exposed to global energy shocks despite the start-up of the 650,000 barrel-per-day Dangote refinery, which had been expected to stabilise domestic supply.
If crude oil continues its upward march toward the $120 level forecast by analysts, Nigerians may face further increases at the pump in the months ahead.
Financial Times reported on Monday that G7 countries were planning to release oil from their strategic reserves to stabilize the market. So far, there is no announced plan or effort by the Nigerian government to take similar steps to cushion the impact on citizens.
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