Petrol hike looms as crude hits $66

A fresh rise in global crude oil prices has sparked concerns that Nigerians may soon face higher pump prices for petrol, diesel, and other refined petroleum products. On Wednesday, crude oil climbed above $66 per barrel, a development that industry stakeholders say could translate into increased fuel costs if the trend persists.

Brent crude, the international pricing benchmark, traded above the $66 mark, while other oil blends also recorded gains. This upward movement has intensified anxiety in the downstream sector, as crude oil remains the primary input for producing refined fuels. Analysts warn that a prolonged rally in crude prices almost always feeds into higher landing and production costs for petroleum products.

Market operators attributed the price surge largely to geopolitical tensions in key oil-producing regions. Ongoing instability in Iran and Venezuela, combined with policy actions and threats from the United States, have unsettled the global oil market. Industry players noted that unless there is a return to political and economic stability in these countries, crude prices are likely to remain volatile and trend upward.

Some oil marketers have projected that crude prices could climb as high as $80 per barrel if current uncertainties continue. Beyond crude prices, the exchange rate was also identified as a critical factor influencing domestic fuel prices, particularly for imported products, as Nigeria still relies heavily on imports to meet local demand.

Speaking on the situation, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said the market dynamics point clearly toward a potential increase in fuel prices. He explained that higher crude prices naturally raise the cost of refined products, both locally produced and imported.

According to him, Nigeria’s limited refining capacity remains a major challenge. With only one major refinery currently supplying the market, there are concerns about whether prices can be sustained if crude oil continues to appreciate. He added that imported petrol would almost certainly become more expensive under such conditions, while locally refined products would also face cost pressures.

Gillis-Harry further noted that global interventions, such as discounted sales of crude from sanctioned countries, may not be enough to significantly alter international oil prices. He warned that if crude prices remain elevated for a sustained period, domestic fuel prices would inevitably adjust upwards.

He also highlighted that rising crude prices could have mixed implications for Nigeria. While higher oil prices would boost government revenue and foreign exchange inflows, the downside would be increased fuel costs for consumers, placing additional strain on households and businesses.

Recent global events have already contributed to the current price rally. Reports of drone attacks on Russia’s Novorossiysk oil terminal, which handles a notable share of global oil supply, and disruptions along the Caspian Pipeline Consortium export route have raised fears of supply shortages. These developments have further tightened the market and supported higher prices.

Meanwhile, figures from the Major Energies Marketers Association of Nigeria (MEMAN) showed that the cost of importing petrol remains well above local ex-depot prices. Although the landing cost of imported petrol declined slightly to about N754.96 per litre, it still exceeds the N699 per litre gantry price offered by the Dangote Petroleum Refinery.

Oil marketers cautioned that if crude prices continue to rise, both imported and domestically refined fuel prices would likely increase. They reiterated calls for the Federal Government to fast-track the full rehabilitation of Nigeria’s refineries in Port Harcourt, Warri, and Kaduna, arguing that strong local refining capacity is critical to cushioning the impact of global oil price shocks on the domestic market.