… NNPC, Dangote may increase fuel Prices Again
Nigeria may be heading for another round of petrol price increases as global crude oil prices surge amid escalating tensions in the Middle East, raising concerns over higher fuel costs in the coming days.
The price of crude oil jumped sharply in early Asian trading, breaching the $100 per barrel mark and at one point climbing to about $111 per barrel, representing a 20 per cent spike within minutes. According to a report by the BBC, the price surged by about 10 per cent within a minute and continued to rise by another 10 per cent within the next 15 minutes during early trading.
The surge has been linked to heightened geopolitical tensions in the Middle East, particularly disruptions affecting energy infrastructure in Iran and across the Gulf region. Markets had earlier remained relatively calm despite fears that crude shipments could be trapped in the Gulf if tankers were unable to pass through the Strait of Hormuz, a vital global oil transit route.
However, the latest escalation has rattled energy markets, with analysts warning that if the shutdown of the Strait of Hormuz persists until the end of March, global oil prices could soar beyond $150 per barrel.
Such a development could have far-reaching implications for Nigeria’s fuel market, as higher crude prices typically translate into increased costs for refined petroleum products, including petrol, jet fuel and other energy derivatives.
Already, the Nigerian fuel market experienced fresh pressure last week after the Dangote Petroleum Refinery raised its ex-depot price of Premium Motor Spirit (PMS), also known as petrol, to N995 per litre. The increase has pushed retail pump prices in some states beyond N1,000 per litre, with a number of filling stations selling petrol at about N1,200 per litre.
Industry watchers say the latest spike in crude prices could trigger another round of increases this week, potentially worsening the burden on Nigerians already grappling with rising inflation and the high cost of living.
The situation is further complicated by developments in the Strait of Hormuz, through which about 15 per cent of global crude oil supply passes. Any prolonged disruption in the corridor could constrain shipments to international markets and push energy prices even higher.
Despite the uncertainty, the spokesman of the Dangote Refinery, Anthony Chiejina, said the company was closely monitoring the evolving global energy crisis. He noted that although the refinery sources crude oil both locally and internationally, the Middle East crisis has pushed up operational costs.
According to him, the refinery purchases crude oil in dollars, while freight and insurance costs have also risen significantly due to the geopolitical tensions. However, he maintained that the refinery’s crude supply chain has not been directly disrupted by the conflict.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC Ltd) has reportedly begun efforts to secure crude oil supply for the Dangote refinery through third-party international traders in order to sustain domestic refining operations.
Officials familiar with the arrangement said the move is part of broader efforts to ensure energy security and maintain stable supply to the country’s largest refinery.
A senior NNPC official, who spoke on condition of anonymity, explained that the national oil company was leveraging its global trading network to source crude at competitive international prices.
“As the national oil company entrusted with safeguarding Nigeria’s energy security, NNPC Limited remains fully committed to supporting domestic refining, including the Dangote Petroleum Refinery. Within the framework of our existing agreements, we continue to facilitate crude supply to the refinery in the face of temporary availability constraints,” the official said.
However, industry analysts warn that sourcing crude from international markets may not immediately lead to lower petrol prices, especially as global energy costs continue to rise.
According to the refinery, it currently receives about five cargoes of crude oil monthly from NNPC under the naira-for-crude arrangement, far below the 13 cargoes required to fully support domestic fuel sales. As a result, the refinery has been forced to rely heavily on imported crude purchased at international market rates.
Stakeholders in the petroleum sector say a more robust implementation of the naira-for-crude policy could help moderate fuel prices in the long run.
Eche Idoko, National Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, said adequate domestic crude allocation to local refineries would significantly influence petrol pricing.
He noted that if the Dangote refinery receives the required cargoes under the policy, it could reduce reliance on imported crude and help stabilise fuel prices.
Energy market analysts also highlighted the impact of limited petrol import licences on competition in the downstream sector.
Jeremiah Olatide, Chief Executive Officer of Petroleumprice.ng, disclosed that nearly 90 per cent of marketers who applied for petrol import permits this year were not granted approvals, largely to encourage local refining.
According to him, maintaining a balance between domestic refining and controlled imports could strengthen Nigeria’s energy security and stabilise prices in the long term.
Despite the challenges, analysts say the Dangote refinery has helped cushion the Nigerian market from even steeper fuel price increases.
They noted that without the refinery’s operations, petrol prices in the country could have climbed as high as N1,500 per litre amid the current global energy crisis.
Recent market data also shows a sharp rise in Nigeria’s crude imports from the United States. According to Kpler analytics, US crude exports to Nigeria rose to 41.13 million barrels in 2025, representing a 161 per cent increase from 15.79 million barrels recorded in 2024.
The increase reflects the growing reliance of domestic refineries on foreign crude supplies despite Nigeria’s status as Africa’s largest oil producer.
With global oil markets remaining volatile, industry observers warn that Nigerian consumers may continue to face rising fuel prices and higher transportation and commodity costs in the weeks ahead.
