Oil falls after Iran talks, but Nigerians still pay over N1,300 for petrol

Global crude oil prices have fallen to their lowest levels since the outbreak of hostilities between the United States, Israel and Iran, raising fresh questions about why petrol prices in Nigeria remain stubbornly high despite easing pressure in international energy markets.

Brent crude, the global oil benchmark, briefly fell below $72.50 per barrel this week, wiping out gains recorded after the conflict disrupted shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.

The decline follows diplomatic progress between Washington and Tehran, including a memorandum of understanding signed earlier this month and subsequent talks in Switzerland aimed at ending the conflict and reducing tensions over Iran’s nuclear programme.

Maritime data show that commercial traffic through the Strait of Hormuz has begun to recover, easing fears of a prolonged supply disruption. The route handles a significant share of global oil and liquefied natural gas shipments.

As fears of supply shortages fade, crude prices have retreated sharply from the highs reached during the conflict. In Nigeria, however, the fall in crude prices has yet to translate into significant relief for consumers.

Petrol continues to sell for more than N1,300 per litre in several parts of the country, despite the moderation in global oil prices. This has triggered criticism from some motorists and consumer groups, with some accusing fuel suppliers, including the Dangote refinery and marketers, of failing to pass on lower costs to consumers.

The debate mirrors concerns raised in other countries. In the United States, President Donald Trump this week ordered an investigation into major oil companies, accusing them of keeping fuel prices elevated even as crude oil prices declined.

“Oil prices have come down so much and we are not seeing anything at the pump by comparison the way they should be,” Trump told reporters in the Oval Office.

Industry players, however, argue that petrol prices do not move in direct proportion to daily changes in crude oil markets.

Energy analysts note that much of the petrol currently being sold in Nigeria may have been produced or imported when crude prices were significantly higher.

Marketers typically hold inventory purchased weeks earlier, meaning retail prices often reflect the cost of existing stock rather than current market conditions.

As a result, companies are usually reluctant to slash prices immediately after crude prices fall because doing so could force them to sell existing inventory at a loss.

Analysts say a sustained decline in global crude prices would eventually create room for lower petrol prices in Nigeria, particularly if the naira remains relatively stable and refiners begin processing cheaper crude supplies.

If Brent crude remains around current levels or falls further over the coming weeks, pressure is likely to mount on refiners and fuel marketers to reduce pump prices.