Petrol Prices Soar in Nigeria Amid Middle East Turmoil
The escalating conflict involving the US, Israel, and Iran has severely impacted the Middle East, now causing a significant ripple effect in Nigeria as petrol stations begin to increase pump prices of Premium Motor Spirit (PMS).
The surge in crude oil prices, driven by the geopolitical tensions, prompted Dangote Refineries to adjust its gantry by N100 on Monday, pushing the ex-depot rate to N874 per litre from N774. This immediate increase has been reflected in pump prices across the country, with consumers facing higher costs for fuel.
Pump Price Adjustments Across Cities
In Abuja, several retail stations operated by the Nigerian National Petroleum Company Limited (NNPCL) have adjusted their pump prices from N875 to N960. Similar increases have been observed in Lagos. Checks along Ogunnusi Road in Lagos revealed that while NNPCL stations were not dispensing fuel, other filling stations had already updated their prices. For instance, a Bovas filling station increased its pump price from N835 per litre to N935.
Geopolitical Tensions and Economic Fallout
Concerns are mounting that PMS prices could rise further, as there appears to be no immediate end in sight to the conflict in Iran. This was notably fuelled by the attacks on Iran by US-Israel forces on Saturday, which tragically claimed the life of Iran’s Supreme Leader Ayatollah Khamenei. Iran has since responded with relentless attacks on US military bases and interests in neighbouring Middle East countries, including the UAE, Qatar, Bahrain, and Saudi Arabia.
This ongoing development has disrupted global oil supply chains, leading to sharp increases in crude oil prices worldwide. Brent Crude surpassed $80 on Monday and is currently trading at $84.2 per barrel. While this might suggest increased revenue from oil receipts for Nigeria, it simultaneously means Nigerians will bear the brunt of higher PMS costs, threatening to worsen inflation and economic shocks across the nation.
Marketers Warn of Further Disruptions
Petroleum marketers, under the umbrella of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), have voiced fresh concerns regarding the escalating Middle East crisis. They warn that these geopolitical tensions could significantly disrupt Nigeria’s fuel market and lead to further increases in domestic pump prices. The marketers stated that the growing military confrontation involving the United States, Iran, Israel, and their allies is already sending shockwaves through global energy markets, with crude oil prices trending upward amidst fears of supply disruptions.
Dr Joseph Obele, National PRO of PETROAN, confirmed the marketers' position in a statement. Speaking in Abuja, PETROAN’s National President, Dr Billy Gillis-Harry, described the situation as a major threat to energy-importing countries like Nigeria. He highlighted that instability around the strategic Strait of Hormuz—a crucial global oil transit chokepoint—has intensified uncertainty in the international petroleum market. Approximately 20 per cent of the world’s crude oil and a substantial portion of global liquefied natural gas (LNG) shipments pass daily through the Strait, making any disruption a serious risk to global supply chains.
Dr Gillis-Harry noted that recent hostilities in the region have affected energy infrastructure and maritime activities, with ripple effects on international oil benchmarks. Brent crude, he said, has climbed towards $80 per barrel, and analysts caution that prices could exceed $100 per barrel if tensions persist or shipping through the Strait is restricted for a prolonged period.
Call for Domestic Refining Capacity
The marketers warned that Nigeria’s heavy reliance on imported refined petroleum products makes the country particularly vulnerable to such external shocks. With the deregulation of the downstream sector, pump prices are largely dictated by global crude oil prices and foreign exchange rates, meaning any sustained increase in crude prices will inevitably reflect at the retail level. Beyond higher fuel prices, the country could also face intensified pressure on foreign exchange reserves, increased transportation costs, and rising inflation if the crisis persists.
In response to these developments, PETROAN urged the Federal Government to urgently prioritise and strengthen domestic refining capacity as a crucial buffer against global volatility. The association emphasised the need for consistent and adequate crude oil supply to local refineries and policies to ensure optimal performance of refining facilities nationwide. Marketers also advocated for the sustained implementation of the Naira-for-Crude policy to reduce dependence on foreign exchange for petroleum imports and help stabilise local fuel prices. They further urged the government to accelerate the rehabilitation and full operationalisation of Nigeria’s four state-owned refineries, arguing that revamping them would significantly cut import dependence and shield the economy from geopolitical shocks.
According to PETROAN, strengthening local refining is not only an economic necessity but also a strategic imperative for national energy security. The association assured Nigerians that it would continue to monitor global market trends and engage relevant stakeholders to ensure consumers are protected from excessive price volatility. It also called for diplomatic efforts and peaceful resolution of conflicts in energy-producing regions to safeguard global petroleum supply chains and prevent further disruptions that could impact countries like Nigeria.