Energy analysts and downstream operators have warned that Nigeria could face another rise in petrol and diesel prices if international crude oil prices climb sharply amid escalating hostilities between the United States and Iran.
The warning follows renewed volatility in the global oil market after military exchanges in the Middle East heightened fears of supply disruptions, particularly around the strategic Strait of Hormuz.
Checks across major Nigerian cities indicate that petrol currently sells between N824 and N880 per litre, depending on location and distribution costs, after recent price adjustments linked to operations at the Dangote Petroleum Refinery.
Market data showed that Brent crude traded at $72.87 per barrel as of Sunday night, while West Texas Intermediate stood at $67.02. Nigeria’s Bonny Light was priced at $78.62 per barrel, with analysts projecting possible increases if tensions persist.
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Kelvin Emmanuel, Chief Executive Officer of Dairy Hills, said Nigeria remained exposed to global oil price movements because a significant share of crude processed domestically is imported.
He stated, “Dangote currently processes an average of 18 million barrels of crude oil monthly. Out of this, about 12 million barrels are imported, while he gets about 5.7 million barrels from the Nigerian National Petroleum Company Limited.”
According to him, any escalation pushing crude above $90 per barrel would compel refiners to review pump prices.
“Any sharp increase in crude oil prices from this escalation will lead to a revision in the cracking margin spread of the refiner and, consequently, the price of refined products,” he said.
Emmanuel added that rising war risk insurance premiums on tanker vessels could further increase the cost of landing crude in Nigeria. “If crude prices rise above $90 per barrel, the refiner will have to revise the price of PMS and diesel in Nigeria,” he noted.
Olatide Jeremiah, Chief Executive Officer of Petroleumprice.ng, said Nigeria’s reliance on foreign crude and refined imports leaves consumers vulnerable to global shocks despite local refining capacity.
He explained, “If Dangote sourced 100 per cent of its crude locally, global price volatility would have little or no impact on domestic fuel prices because transactions would be naira-denominated.”
Jeremiah, however, observed that more than 60 per cent of feedstock for the refinery is sourced abroad. “Fuel prices will be at the mercy of oil prices. Nigerians should brace for higher fuel prices if the surge continues,” he said.
An energy law expert at the University of Lagos, Dayo Ayoade, said the removal of fuel subsidies means domestic pump prices now reflect international market realities.
He stated, “The instability in the Middle East and any threat to the Strait of Hormuz will drive oil prices higher based on both perception and real supply concerns.”
Professor Emeritus Wumi Iledare, a petroleum economist, cautioned against panic, noting that the global oil market is more diversified than in previous decades. “We must resist the temptation to interpret this as the beginning of another historic oil shock,” he said.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, said marketers were monitoring developments closely. “Anything that affects the international oil market will affect local supply and prices,” he said.
The tensions escalated after coordinated strikes involving the United States and Israel reportedly targeted Iran, prompting retaliatory threats and heightened security concerns in the Gulf region.
Oil traders noted that more than 20 per cent of global crude shipments pass through the Strait of Hormuz, making any disruption to the corridor a significant risk to global supply chains.
War risk premiums on vessels operating in the region have reportedly increased, while some shipping companies have temporarily suspended cargo movements pending security assessments.
Meanwhile, members of the OPEC+ alliance announced a production adjustment of 206,000 barrels per day effective in April, though analysts said the increment may not offset potential supply disruptions.
Jorge Leon of Rystad Energy said, “If oil cannot move through Hormuz, an extra 206,000 barrels per day does very little to ease the market. Prices will respond to Gulf developments and shipping flows.”
As global markets react to the unfolding crisis, stakeholders in Nigeria’s downstream sector say domestic fuel prices will largely depend on the trajectory of crude oil prices and the stability of supply routes in the coming weeks.
