Petrol prices in Nigeria could climb to about N1,400 per litre in the coming days as rising global crude oil prices, supply uncertainties and market adjustments linked to the operations of the Dangote Petroleum Refinery combine to tighten conditions in the country’s downstream petroleum market.
Industry sources say petrol loading activities at the refinery slowed over the weekend as marketers awaited a possible revision of the facility’s ex-depot price, which had already reached N995 per litre, reflecting the latest spike in international crude benchmarks.
The development comes at a time when global oil markets are experiencing renewed volatility driven largely by escalating geopolitical tensions in the Middle East.
According to reports by the Associated Press and other international media outlets, benchmark Brent Crude surged past $115 per barrel in early trading on Monday after fears that conflict in the region could disrupt energy supplies passing through the strategic Strait of Hormuz.
The waterway handles roughly one-fifth of global oil shipments, making it one of the most critical arteries in the world’s energy supply chain. Shipping insurers have reportedly increased risk premiums for tankers operating in the region, while freight rates for large crude carriers have jumped sharply amid fears of potential disruptions.
Energy analysts told the AP that the spike reflects growing concern among traders that any escalation affecting tanker routes in the Persian Gulf could tighten global supply. Insurance costs for oil shipments have risen, and shipping companies are increasingly cautious about transiting the Strait of Hormuz, factors that are pushing up the landed cost of crude for refiners worldwide.
The impact is already filtering into Nigeria’s domestic petroleum market, where the price of petrol is closely linked to international crude benchmarks due to the country’s deregulated pricing regime.
Market participants said marketers had been unable to load petrol from the Dangote refinery over the weekend as they waited for clarity on the refinery’s next pricing move.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Dr Billy Gillis-Harry, confirmed that many marketers could not lift products from the facility.
“Today we didn’t load and we are not sure what will happen tomorrow,” he said, noting that the uncertainty was linked to volatile crude oil prices. “The price of crude is not stable; it can go up or come down. Until tensions in the Middle East ease, it will be difficult to predict the direction of the market.”
However, the refinery dismissed reports suggesting that loading operations had been halted entirely. The company maintained that product pricing would continue to reflect prevailing global market conditions.
Across Nigeria, petrol prices have already risen sharply in recent weeks. Retail checks at filling stations in Lagos show pump prices ranging between N1,015 and N1,090 per litre depending on location and supply arrangements, with some operators warning that prices could climb further if crude continues its upward trajectory.
Data from the Major Energies Marketers Association of Nigeria indicates that ex-depot prices for petrol in Lagos currently range between about N940 and N1,000 per litre, reflecting rising costs associated with crude procurement, logistics and foreign exchange.
Industry analysts say the recent surge in crude prices has significantly increased feedstock costs for refiners. Nigeria’s premium crude grade, Bonny Light crude, is reportedly trading between $3 and $6 above the Brent benchmark. When freight charges of roughly $3.50 per barrel are added, the effective landing cost for refiners could range between $88 and $95 per barrel as of last week.
That represents a substantial jump from the roughly $68 per barrel level at which crude was previously supplied when petrol ex-depot prices were closer to N774 per litre.
Industry observers also note that the refinery has faced constraints in securing adequate local crude supply, forcing it to supplement domestic allocations with imported feedstock purchased at international prices and settled in foreign currency.
The refinery reportedly receives only about five cargoes of crude monthly from the Nigerian National Petroleum Company Limited, well below the estimated 13 cargoes required each month to sustain large-scale domestic petrol production. The shortfall has compelled additional purchases through global trading channels, exposing the refinery to exchange-rate volatility and higher procurement costs.
Energy experts say the situation highlights the risks of relying heavily on a single dominant supply source for refined petroleum products in Nigeria’s deregulated market.
Beyond petrol, the global oil price rally is also raising operating costs across key sectors of Nigeria’s economy.
Manufacturers, logistics companies and other businesses are increasingly dependent on diesel generators due to persistent electricity shortages. Industry estimates suggest Nigerian businesses could spend as much as N620 billion on diesel this month alone, as higher crude prices drive up the cost of refined fuels.
Similarly, the aviation sector is facing mounting pressure. Aviation fuel prices have surged from about N965 per litre in late February to roughly N1,785 per litre within days, raising the prospect of higher airfares as airlines attempt to offset rising operating costs.
The global oil rally has also been accompanied by rising shipping costs. Freight rates for very large crude carriers have jumped by more than 200 per cent, while rates for liquefied natural gas carriers have reportedly increased by more than 500 per cent as shipping routes face growing geopolitical risk.
For Nigeria, which is still navigating the transition to a deregulated petroleum market, the developments underscore how global energy shocks can quickly translate into domestic price pressures.
Energy economists say stabilising domestic fuel prices in the long term will depend on improved crude supply arrangements for local refineries, increased refining capacity and more predictable foreign exchange conditions.
Until then, motorists and businesses across the country remain exposed to the same global oil market volatility that is currently pushing crude prices above the $100-per-barrel threshold.
