KEY POINTS
- Global crude oil prices have surged above $70 per barrel due to rising U.S.-Iran tensions, threatening disruptions to supply through the Strait of Hormuz.
- Nigerian marketers warn petrol prices could reach N1,000 per litre, especially in remote areas, following Dangote Refinery’s increase to N839 per litre and higher landing costs.
- While rising costs are slowing consumer sales, Dangote Refinery asserts it can meet national demand with 75 million litres daily, aiming to stabilize the market and reduce import dependency.
International oil benchmarks surged past $70 per barrel this week, with Brent crude reaching $70.71 and US West Texas Intermediate hitting $65.42.
By Friday, prices climbed further to $70.89 and $65.80 respectively. Energy analysts attribute the sharp increase to escalating geopolitical conflict, as the United States considers targeted strikes against Iran.
The market’s primary concern centers on the potential closure of the Strait of Hormuz. a critical maritime passage handling approximately 20 million barrels of oil daily, which would severely disrupt global supply chains.
Immediate Domino Effect on Nigerian Refinery Pricing
The international price surge triggered an immediate domestic response as the Dangote Petroleum Refinery increased its ex-depot petrol price from N739 to N839 per litre.
This N100 overnight jump represents one of the most significant single adjustments since Nigeria’s fuel subsidy removal.
The refinery’s pricing shift has invalidated previous loading authorizations, requiring marketers who had already made payments to submit additional funds before product evacuation
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed that pump prices are poised for further increases.
“The crude surge will definitely affect our local market,” Ukadike stated. “We are gearing towards N1,000 per litre, particularly in areas far from depots.” He described the current market dynamic as “too much naira now pursuing a few litres of petroleum products,” noting that consumer demand has already slowed significantly compared to December’s festive season.
Lagos Retail Landscape Reflects Rapid Escalation
Across Nigeria’s commercial capital, filling stations displayed unprecedented price variations. The Nigerian National Petroleum Company Limited dispensed petrol at N849 per litre, while MRS outlets sold at N839. Independent stations ranged between N830 and N859, with only a handful maintaining slightly lower rates.
A major marketer and importer, speaking anonymously, revealed that landing costs could exceed N900 per litre soon, recalling that similar crude price levels previously pushed retail prices toward the N1,000 threshold.
In response to the growing crisis, Dangote Petroleum Refinery issued a public notice emphasizing its capacity to meet national demand. The facility can supply 75 million litres of Premium Motor Spirit daily against estimated national consumption of 50 million litres.
Additionally, it can provide 25 million litres of Automotive Gas Oil (diesel) versus 14 million litres demand, and 20 million litres of aviation fuel against a 4 million litre requirement. The company positioned itself as a stabilizing force, stating that domestic refining reduces foreign exchange exposure and improves supply security.
