Nigerian Petrol Prices Swing as Marketers Cut Rates After Brief Hike Amid Global Oil Volatility

Key facts

• Ranoil and Empire Energy in Abuja reduced petrol to N1,365 and N1,375 per litre on Saturday, down from N1,440 on Friday.
• Dangote Refinery raised ex-depot petrol price from N1,200 to N1,275 per litre and diesel to N1,800 per litre.
• Brent crude hit $126.41 per barrel on Wednesday, the highest since March 9, 2022, before falling to $113.89.
• Global crude oil prices jumped on US-Iran conflict fears after Israel's defence minister threatened further action.
• Dangote Refinery suspended diesel loading operations around midnight Wednesday, halting allocations to marketers.
• Petrol prices in Lagos rose to N1,300 per litre from N1,250 at many filling stations.
• Industry operators warn of imminent depot price hikes if crude remains elevated, affecting transport and inflation.
• Brent crude traded at $124.90 per barrel on Thursday, up 5.82%, with WTI at $109.20.

Abuja Stations Slash Prices After Brief Surge

Nigerian filling stations in Abuja reduced their Premium Motor Spirit (PMS) prices on Saturday, just 24 hours after a sharp increase. Ranoil and Empire Energy outlets adjusted their pump prices to N1,365 and N1,375 per litre respectively, down from N1,440 per litre on Friday. The cuts of N65 and N75 per litre were aimed at attracting customers, according to market checks.

Dangote Refinery Raises Ex-Depot Rates Amid Crude Rally

The Dangote Petroleum Refinery increased its ex-depot petrol price from N1,200 to N1,275 per litre, while coastal supply prices climbed to N1,215 per litre. Diesel was raised to N1,800 per litre from N1,750, and the refinery suspended loading operations around midnight Wednesday, halting diesel allocations to marketers. The moves followed a sharp rise in international crude prices, with Brent jumping from $105 per barrel on Monday to $125 by Wednesday.

Global Oil Prices Swing on US-Iran Tensions

Brent crude futures surged to a four-year high of $126.41 per barrel on Wednesday, the highest since March 9, 2022, before retreating to $113.89 by 13:27 GMT. The spike came after Israel's Defence Minister, Israel Katz, stated that Israel might need to act again in Iran. West Texas Intermediate also rose, reaching $110.93 before falling to $104.60. Both benchmarks are on track for their fourth consecutive monthly gains, reflecting fears that the Iran conflict could choke global oil supplies.

Marketers Face Pressure as Landing Costs Rise

Olatide Jeremiah, chief executive of Petroleumprice.ng, said higher crude prices directly increase the cost of importing refined products, including petrol, diesel, and aviation fuel. This puts fresh pressure on landing costs and sharply raises replacement costs for downstream marketers. Jeremiah warned that a fresh round of depot price hikes appears unavoidable, with upward reviews expected across major depots if crude prices remain elevated.

Depot Prices Rise Across Key Locations

Market checks show major depots nationwide sold at higher prices during Wednesday's closing hours. In Lagos, Swift and Duport sold diesel at N1,980 per litre, while TMDK sold at N1,950. Depot data for Calabar shows Northwest depot sold at N1,985, Warri First Fortune at N1,950, and Port Harcourt Matrix at N2,050 per litre. The combination of global oil price spikes and the suspension of loading activities is feeding immediate pricing pressure across Nigeria's downstream market.

Consumers Brace for Broader Economic Impact

The expected increase in pump prices will likely reverberate across the domestic market, affecting transport costs, airfares, and broader inflation. Unless global supply concerns ease soon, Nigerian consumers and businesses should brace for renewed pressure across the petroleum value chain, Jeremiah said. On Thursday, Brent crude climbed close to $125 per barrel, heightening fears of another round of fuel price increases across importing countries, including Nigeria.

Volatility Underscores Nigeria's Vulnerability to Crude Shocks

The rapid price swings highlight Nigeria's continued exposure to international crude market dynamics, despite the Dangote Refinery's efforts to boost domestic refining capacity. The momentary dip in pump prices in Abuja may prove short-lived if global tensions persist. With Brent trading at $124.90 per barrel on Thursday, up 5.82%, and WTI at $109.20, the downstream market remains on edge, awaiting the next move from marketers and the government.

The bottom line

• Petrol prices in Abuja dropped by up to N75 per litre within 24 hours of a hike, reflecting volatile market conditions.
• Dangote Refinery raised ex-depot prices and suspended diesel loading, adding to supply pressures.
• Global crude oil prices surged to a four-year high of $126.41 on US-Iran tensions, before retreating.
• Industry analysts warn of imminent depot price hikes if crude remains elevated, impacting transport and inflation.
• Nigeria's downstream market remains highly sensitive to international crude price movements, despite domestic refining capacity.