Oil marketers in Nigeria have issued a stark warning that the pump price of petrol could have skyrocketed to as high as N1,500 per litre if the country remained heavily reliant on imported refined petroleum products. According to industry experts, the emergence of local refining capacity, particularly through the Dangote Refinery, has played a crucial role in mitigating the impact of escalating global oil prices and supply chain disruptions.
Global Pressures and Domestic Realities
Marketers had previously cautioned that petrol prices might climb to approximately N1,200 per litre due to the ongoing crisis in the Middle East, which has injected significant volatility into international crude oil markets. They emphasize that Nigeria's petrol prices are directly influenced by three key factors: international crude oil prices, exchange rate fluctuations, and rising logistics costs.
Over the recent weekend, petrol was already selling for more than N1,000 per litre at numerous filling stations in Lagos, marking a sharp increase from the earlier average of about N939 per litre. The Nigerian Midstream and Downstream Petroleum Regulatory Authority has acknowledged that these price fluctuations reflect market forces following the deregulation of Nigeria's downstream petroleum sector.
Industry Voices on the Crisis
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, stated that the current price trend is largely beyond the control of marketers. He explained that while prices may continue to rise, the presence of local refining capacity has prevented an even more drastic increase.
Ukadike elaborated that if Nigeria were still importing the majority of its fuel, the current global pressures could have driven petrol prices far higher, potentially reaching N1,500 per litre. This scenario would also likely create severe shortages due to intensified competition for limited international supply.
Another industry operator, Anwalu Ahmed, highlighted that the current situation results from a combination of global and domestic pressures affecting Nigeria's petroleum supply chain. He noted that tensions in the Middle East—one of the world's most critical oil-producing regions—have heightened fears of supply disruptions, causing traders to incorporate additional risk premiums into crude oil and refined product prices.
Market Uncertainty and Import Dependence
Ahmed pointed out that even when actual supply has not been directly affected, market uncertainty alone can trigger immediate price increases. He also emphasized that Nigeria still partially depends on imported refined products, which means higher landing costs whenever international crude prices surge.
Recent reports have indicated a temporary slowdown in petrol loading from the Dangote Refinery, raising concerns that pump prices could increase further as Brent crude trades above $100 per barrel. Some filling stations in Lagos were observed to have temporarily halted sales as they awaited new pricing decisions.
Dispelling Misconceptions
Ukadike dismissed claims that marketers were exploiting old stock purchased at lower prices, clarifying that price adjustments in the oil and gas sector are directly tied to crude oil costs and exchange rate movements. He added that global fuel prices, particularly in Europe, have risen sharply in recent weeks, further exacerbating pressure on Nigeria's domestic market.
The overall message from industry players is clear: while current petrol prices are challenging, the situation would be far more severe without the stabilizing influence of local refining efforts like those of the Dangote Refinery.
