Oil marketers in Nigeria are preparing to increase the pump prices of petroleum products after international crude oil prices climbed above $100 per barrel, a move that could put fresh pressure on petrol prices and increase operating costs for businesses and households already dealing with high inflation.
The development follows a sharp rise in global crude benchmarks, with the OPEC Basket, which includes Nigeria’s Bonny Light, rising above $100 per barrel from more than $95, representing an increase of about 5.2%. Brent crude also climbed to $100.60 per barrel from $97, a 2.77% increase, while Murban crude jumped 6.83% to $118.30 per barrel, according to data from Oilprice.com.
Marketers Confirm Price Adjustments Ahead
Joseph Ehimen, Lagos State Chairman of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), confirmed that marketers were likely to adjust their prices. “Certainly, we are going to adjust the pump prices after our next purchases. It will be based on market forces, factoring in all cost elements, including logistics to filling stations,” he said.
The sharp rise in crude prices has been linked to escalating tensions in the Middle East and concerns about possible disruptions to global crude oil supplies. The development has raised fresh concerns about its potential effect on fuel prices, transportation costs and the broader Nigerian economy.
Economic Impact of Higher Crude Prices
Economist and communications expert Clifford Egbomeade said the immediate impact of rising crude prices would be felt through higher costs across the economy. “The immediate effect on Nigeria is a cost shock. Higher crude prices will raise the cost of diesel, transport, freight and other energy-intensive inputs, putting pressure on business margins and household incomes,” he said.
Egbomeade noted that Nigeria could benefit from higher oil export earnings if the government properly manages the additional revenue and sustains crude production. However, he warned that a prolonged rise in global oil prices could worsen existing economic pressures.
He also called for the domestic crude supply framework to function more efficiently so that Dangote Refinery and other operating refineries can access Nigerian crude at commercially viable prices.
Experts Urge Transport Subsidies Instead of Fuel Subsidies
Adetunji Oyebanji, immediate past Managing Director and Chief Executive Officer of 11 Plc, also urged the government to focus on measures that would reduce the wider impact of rising fuel prices. Oyebanji maintained that Nigerians would continue to feel the effect of crude price movements because the downstream petroleum market is deregulated.
“I just think that as these prices are going up, rather than looking for solutions like, you know, are they going to be subsidising fuel, they should do things like subsidising transportation, like the BRT, and reduce the cost, and also that of government hospitals or schools and other things that can make life easier for people,” he said.
He warned that reinstating petrol subsidies could place a heavy financial burden on the government, especially as pump prices have risen significantly. Oyebanji also called for greater accountability from governments at both federal and state levels, saying increased government revenue should translate into tangible relief for Nigerians.
