Expect New Fuel Price Hike: Crude Oil Soars Towards $100 Per Barrel
- Brent crude is now selling at a record high, forcing many refiners and fuel marketers to frequently adjust prices of petroleum prices
- Data from Oilprice.com shows that Brent is selling at $95 per barrel, and analysts speculate that the development could lead to elevated fuel prices in Nigeria and elsewhere
- Already, petrol depot prices are rising rapidly in Nigeria, with marketers racing to hedge against potential losses
PAY ATTENTION: Find it fast with our new search feature at Legit.ng!
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigerian motorists could face renewed pressure at the pump as international crude oil prices surge towards the $100 per barrel mark, raising concerns over another round of petrol and diesel price increases.
Brent crude climbed to $97.29 per barrel on Thursday, gaining $1.66 or 1.7 per cent, while US West Texas Intermediate (WTI) also moved higher. The rally has been driven largely by escalating tensions in the Middle East, growing concerns over supply disruptions and tightening global inventories.
Source: Getty Images
The latest increase comes at a sensitive time for Nigeria, where petrol and diesel prices remain highly exposed to international crude and refined-product markets.
Global refining crisis deepens
The challenge extends beyond the price of crude oil itself. A growing shortage of refining capacity is putting additional pressure on global supplies of petrol, diesel and other petroleum products.
The International Energy Agency (IEA) said global refinery crude throughputs rose in July but remained nearly 5 million barrels per day below the level recorded a year earlier, standing at 80.9 million barrels per day.
The agency also warned that disruptions to refined-product exports from the Middle East and attacks on Russian refineries had reduced available refining capacity, leaving other parts of the global refining system unable to fully replace the lost supply.
Diesel markets are particularly tight, with refinery margins and product prices rising sharply as supplies remain constrained. The IEA said diesel exports from Russia, the Middle East and Asia were down significantly year-on-year.
What it means for Nigerian fuel prices
For Nigeria, sustained crude prices near or above $100 could increase the cost pressures facing refiners, importers and petroleum marketers.
Although Nigeria has expanded domestic refining capacity, fuel pricing remains influenced by crude prices, refined-product benchmarks, exchange-rate movements, logistics and other operating costs.
A prolonged crude rally could therefore make it more difficult for refiners and marketers to maintain current pump prices if their input costs continue rising.
The pressure is already visible in the diesel market. Dangote Petroleum Refinery raised its diesel gantry price by ₦100 per litre from September 4, following a ₦65 per litre increase in petrol announced days earlier.
Consumers brace for more pressure
The immediate impact of Brent approaching $100 will depend on how long prices remain elevated and whether global refining disruptions worsen or ease.
However, with oil prices recording their strongest weekly gains in weeks and geopolitical risks still elevated, the possibility of further fuel price adjustments remains a major concern for Nigerian consumers.
Nigeria's petrol depot prices hit N1,315 per litre
Nigerian motorists and consumers could be heading for another round of petrol price increases as the ex-depot price of Premium Motor Spirit, PMS, crosses N1,300 per litre.
Source: UGC
The latest increase comes less than a week after depot owners raised their prices, adding fresh pressure to the already elevated cost of petrol across the country.
Data from PetroleumpriceNG showed that several depots have adjusted their petrol prices to between N1,300 and N1,310 per litre, up from the previous range of N1,265 to N1,275 per litre.
Matrix Warri, Calabar and Optima depots reportedly increased their prices to N1,300, N1,310 and N1,305 per litre, respectively.
More fuel enters Nigeria, marketers promise cheaper petrol
Legit.ng earlier reported that fresh supplies of fuel are set to enter the market, prompting a possible drop in petrol prices.
With rising costs placing immense pressure on households, the importation of new petroleum products could be a lifeline that many have been waiting for amidst the financial strain.
Source: Legit.ng
