Energy Experts Warn of Potential Petrol and Diesel Price Hike in Nigeria Amid US-Iran Conflict
Energy analysts and downstream operators have issued a stark warning that petrol and diesel prices in Nigeria could experience a significant increase if global crude oil prices climb above $90 per barrel. This caution comes amid escalating tensions between the United States and Iran, which have heightened volatility in the international oil market.
Global Oil Market Volatility and Its Impact on Nigeria
The renewed hostilities in the Middle East have triggered sharp fluctuations in global oil prices, with experts expressing concern over Nigeria's continued exposure to these international shocks. Despite ongoing investments in local refining capacity, the country's domestic fuel pricing remains vulnerable to global market dynamics.
Recent market checks across major Nigerian cities reveal that petrol is currently retailing between N824 and N880 per litre, with variations depending on location and logistics costs. This pricing follows a recent reduction by the Dangote Petroleum Refinery, which lowered its Premium Motor Spirit (PMS) gantry price by N25 per litre in February 2026, bringing the ex-depot rate down from N799 to N774 per litre.
Critical Global Energy Corridor Under Threat
Over the weekend, global oil prices surged sharply following reports that several major oil companies had halted tanker movements near the Strait of Hormuz. This critical energy corridor links the Persian Gulf to the Indian Ocean and handles more than 20 percent of global oil shipments. Any disruption to traffic through this strategic waterway is widely viewed as capable of triggering significant supply shortages and subsequent price spikes.
As of Sunday evening, Brent crude was trading at $72.87 per barrel, West Texas Intermediate at $67.02, while Nigeria's Bonny Light stood at $78.62 per barrel. Analysts have warned that sustained escalation in the Middle East could push prices closer to or beyond the $90 benchmark, which would directly impact fuel costs in Nigeria.
Nigeria's Dependency on Imported Crude and Refined Products
Olatide Jeremiah, Chief Executive Officer of Petroleumprice.ng, highlighted Nigeria's ongoing dependency on imported crude and refined products, which leaves consumers exposed to international market shocks. He explained that while the Petroleum Industry Act prioritizes domestic refineries in crude allocation, more than 60 percent of the Dangote refinery's feedstock is reportedly sourced from abroad. Additionally, approximately 40 percent of refined products consumed locally are still imported.
Jeremiah noted that although higher oil prices may boost government revenue through increased export earnings, Nigerian consumers could face substantially higher pump prices if global benchmarks continue to surge.
Market Dynamics in the Post-Subsidy Era
Dayo Ayoade, an energy law expert at the University of Lagos, emphasized that Nigeria can no longer shield consumers from global price volatility following the complete removal of fuel subsidies. He explained that oil prices are primarily driven by global demand and supply dynamics, with geopolitical tensions often introducing significant risk premiums into the market.
According to Ayoade, any sustained rise in crude prices will directly impact domestic fuel prices under the current market-based framework, making Nigerian consumers particularly vulnerable to international developments.
Experts Urge Caution Amid Market Uncertainty
Professor Emeritus Wumi Iledare, a prominent petroleum economist, urged caution against panic, noting that the global oil market has become more diversified and transparent compared to previous geopolitical crises such as the 1973 oil embargo or the Gulf War era. He acknowledged that tensions may temporarily elevate prices but suggested that fundamentals including supply diversification and improved market information could limit long-term shocks.
Marketers Monitoring Developments Closely
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, confirmed that marketers are closely monitoring developments and will adjust pricing based on prevailing market conditions. He assured consumers that marketers would continue to ensure product availability as long as supply remains steady.
Escalating Crisis and Production Adjustments
The crisis escalated following coordinated military strikes on Iran by the United States and Israel, raising fears of broader regional conflict. Reports indicate that key members of the OPEC+ alliance have announced a production adjustment of 206,000 barrels per day effective April, though analysts suggest this increase may not be sufficient to offset potential disruptions if tensions persist around the Strait of Hormuz.
Long-Term Implications for Nigeria's Energy Security
Energy experts say the current situation underscores Nigeria's continued exposure to global oil shocks and highlights the urgent need to boost crude production, curb oil theft, and ensure consistent domestic supply to local refineries to enhance national energy security. The warning comes as private depot operators recently announced updated petrol prices in a move aimed at closing the widening gap between their rates and those of the Dangote Refinery.
These price adjustments follow renewed competition in Nigeria's downstream petroleum sector after the Dangote refinery resumed sales of Premium Motor Spirit (PMS) to marketers. Earlier reports showed that the refinery restarted petrol sales at N774 per litre after a prolonged pause that had pushed PMS prices higher across the country.
