Nigeria is facing a steep increase in petrol prices, with costs expected to reach nearly N900 per litre due to rising global crude oil prices. This follows new U.S. sanctions on Iran, which have tightened global oil supply and driven prices upward. On Thursday, Brent crude futures rose to $71.75 per barrel, reflecting heightened market concerns.
The sanctions targeted entities, including a Chinese ‘teapot’ refinery, for processing Iranian crude. With Iran producing over three million barrels per day, the restrictions have contributed to supply shortages. Additionally, escalating tensions in the Middle East—such as Israel’s renewed military operations in Gaza and ongoing U.S. airstrikes on Houthi targets in Yemen—have further driven up oil prices. Analysts at JPMorgan expect Brent prices to recover to the mid-$70s before eventually settling at an average of $73 per barrel.
In Nigeria, the impact is already being felt at loading depots, where petrol prices surged on Thursday. Matrix Warri, Zamson, and Rainoil increased their rates from about N852 to N875 per litre. Pinnacle Warri and Sobaz also adjusted their prices upward, reflecting the shifting cost of imports and supply constraints.
Compounding the situation, Dangote Refinery recently suspended the sale of petroleum products in naira, citing challenges in balancing its crude oil purchase obligations—denominated in U.S. dollars—with naira sales proceeds. The refinery clarified that this is a temporary measure, emphasizing that it remains committed to resuming naira sales once it secures naira-based crude allocations from NNPC.
This development comes at a time when Nigerians had been enjoying slight relief from fuel prices, following three reductions by Dangote Refinery since January. However, with global oil market volatility and supply chain disruptions, petrol prices are expected to remain on an upward trajectory in the coming weeks.
