Nigeria Headed for Another Fuel Price Hike at Filling Stations as Crude Oil Hits $81
- Nigerians may soon face disappointment with a looming increase in petrol prices, driven by a surge in global crude oil prices
- The increase is driven by anticipated stricter US sanctions on Russian oil producers, which could disrupt crude supplies to key importers
- Reports have it that the international price has already forced depot operators to adjust prices, with filling stations set to follow suit
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Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
Concerns are mounting that the cost of key fuels in Nigeria, particularly petrol, may increase in the coming weeks due to a spike in global crude oil prices.
If the increase in crude oil prices leads to a corresponding rise in local petrol pump prices, it could dampen the hopes of many Nigerians who were starting to feel some relief from recent price reductions.
Source: UGC
As of Tuesday, January 14, 2024, Brent crude experienced a $1.48 increase, equivalent to a 1.9% rise, reaching $81.96 per barrel—its highest point since August 27, 2023.
Why crude oil price is rising
This rise is fueled by expectations of tougher US sanctions on Russian oil producers, potentially disrupting crude supplies to major importers like China and India.
The United States aims to restrict Moscow's revenue streams used to fund the ongoing war in Ukraine.
This move is anticipated to significantly impact Russian oil exports to India and China, prompting these countries to seek alternative supplies from regions such as the Middle East, Africa, and the Americas, thereby adding upward pressure on oil prices.
Last week, crude prices hovered around $76 per barrel.
Good and bad outcome for Nigeria
On the positive side, higher oil prices are expected to boost Nigeria’s revenue, as current prices surpass the $75 per barrel benchmark set in the country’s 2025 budget proposal.
The ongoing "price war" between Nigeria's two major petrol producers, Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC), has recently driven petrol prices down from over N1,000 to below N1,000 per litre in several parts of the country.
As crude oil refiners face rising costs globally, the current surge in crude oil prices could lead to higher prices for petrol, diesel, jet fuel, kerosene, and other related products if the trend persists.
According to a report by Legit.ng, oil depot operators have begun revising their ex-depot petrol prices, increasing them from N907 to N950 per litre.
For many years, Nigeria relied entirely on fuel imports. However, this changed recently with the commencement of production at the 650,000 barrels-per-day Dangote Refinery, followed by operations at the NNPC-owned Port Harcourt refinery and the Warri facility.
Fuel prices to crash in 2025
In a related development, Legit.ng reported that petroleum product marketers in Nigeria anticipate a substantial drop in petrol prices by 2025, potentially reaching as low as N500 per litre.
The marketers believe that the reopening of the Port Harcourt and Warri refineries will play a key role in driving this expected price decline.
They also emphasized that the consistent availability of petroleum products would foster competition, ultimately leading to further price reductions.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
