Rising crude prices threaten fresh petrol price hike in Nigeria

Nigeria’s petrol market is facing renewed price pressure following a sharp rise in international crude oil prices, with the cost of Premium Motor Spirit (PMS) potentially climbing further above N1,290 per litre at the depot level.

Brent crude rose to $95.41 per barrel on Wednesday, while US West Texas Intermediate (WTI) also gained, reaching $90.79 per barrel as of the time of filing this report.

The surge has heightened concerns over another round of increases in domestic petrol prices, particularly as Nigeria remains exposed to fluctuations in global crude prices and associated supply and logistics costs.

Industry data showed that ex-depot petrol prices, which had recently ranged between N1,267 and N1,275 per litre, could rise beyond N1,290 if the current rally in crude prices persists.

The pressure is already being felt at filling stations across the country. A market survey conducted on Wednesday showed that petrol was being sold at between N1,310 and N1,345 per litre in different locations, raising concerns that pump prices could cross the N1,400 per litre threshold.

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The latest crude oil rally has also triggered increases in petroleum product prices internationally. In the United States, diesel prices reportedly climbed by seven per cent to $4.71 per gallon amid heightened geopolitical tensions and US military action involving Iran.

For Nigerian consumers and businesses, another increase in petrol prices could further intensify inflationary pressures, particularly through higher transportation, logistics and operating costs.

Petrol remains a major component of Nigeria’s transportation and distribution system, meaning sustained increases in pump prices are likely to affect the prices of goods and services across the economy.

Against the backdrop of the rising international market, petroleum marketers have renewed calls for government intervention to prevent further increases in domestic fuel prices.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) urged the Federal Government to engage domestic refiners and other stakeholders in finding ways to moderate prices.

IPMAN National President, Abubakar Maigandi, specifically appealed to the government to broker an arrangement with the Dangote Refinery to help reduce petrol prices.

The marketers’ appeal comes as consumers continue to grapple with elevated petrol prices following the removal of fuel subsidy and the subsequent deregulation of the downstream petroleum sector.

Industry stakeholders have maintained that increased domestic refining capacity could help shield Nigeria from some of the effects of international crude and refined-product price volatility.

However, with Brent crude now trading above $95 per barrel, concerns are mounting that the latest global energy market pressures could translate into another increase in the cost of petrol for Nigerian consumers.