Petrol Pump Prices Could Increase by Another N200 per Liter as Global Crude Oil Surges
Nigerians may soon face another significant increase in petrol prices, with industry experts warning that pump rates could rise by approximately N200 per liter. This potential hike comes as global crude oil prices have surged above the $70 per barrel mark, creating new cost pressures in Nigeria's fuel market.
Recent Price Adjustments and Market Developments
The warning about further price increases follows recent adjustments in the Nigerian fuel market. Just days ago, marketers raised the average pump price from about N750 per liter to N850 per liter. This change was triggered by Dangote Petroleum Refinery's decision to adjust its retail price from N739 to N839 per liter, prompting numerous filling stations across the country to follow suit with similar increases.
Industry operators now caution that unless global oil prices experience a significant drop and the Nigerian naira strengthens considerably, retail prices will likely be adjusted upward to reflect the new cost realities facing importers and distributors.
Industry Experts Analyze the Situation
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, explained that sustained rises in crude oil prices would inevitably affect petrol pump prices nationwide. He emphasized that crude oil prices and exchange rates remain the primary determinants of domestic fuel prices, noting that changes in either factor could push petrol prices higher.
"As independent marketers, we don't want prices to increase," Ukadike stated. "Any rise will be driven by international developments and crude oil prices. If crude prices fall, petroleum product prices will also come down. That is how the market works."
Ukadike warned that petrol could potentially sell for up to N1,000 per liter, particularly in locations far from refineries and fuel depots, if crude prices continue their upward trajectory.
Data Reveals Cost Pressures
Data obtained from the Major Energies Marketers Association of Nigeria (MEMAN) shows the significant impact of crude oil prices on imported fuel costs. As of Friday, January 23, the 30-day average prices for imported petrol stood at N728.88 per liter when crude oil averaged $65 per barrel. With crude now above $70 per barrel, these costs have increased substantially.
Olatide Jeremiah, CEO of PetroleumPrice.ng, provided additional context about the relationship between crude oil and refined products. "Crude oil accounts for 80% of the production components of refined products anywhere in the world," he explained, highlighting how global crude prices directly influence depot and retail prices in Nigeria.
Dangote Refinery's Role in the Market
Amid these price concerns, the Dangote Petroleum Refinery has reaffirmed its capacity to meet Nigeria's fuel demand. The refinery stated it can supply 75 million liters of petrol daily against an estimated national consumption of 50 million liters. Additionally, it can provide 25 million liters of diesel daily compared with an estimated demand of 14 million liters, plus 20 million liters of aviation fuel that far exceeds domestic consumption levels.
According to the refinery, this excess supply capacity should enhance market stability, reduce reliance on imports, and strengthen Nigeria's downstream supply chain over time. However, in the short term, the refinery's pricing decisions continue to influence market rates across the country.
The potential N200 per liter increase would represent another significant burden for Nigerian consumers and businesses already grappling with high energy costs. Industry observers will be closely monitoring global crude oil markets and exchange rate movements in the coming weeks to determine whether these projected price increases will materialize.
