Oil marketers have revealed that the pump price of petrol could have risen as high as N1,500 per litre by now if we had not improved our domestic refining capacity, especially with the likes of Dangote Refinery, and still importing most of our petroleum products.
They had rightly predicted that the pump price of petrol would rise to N1,200 per litre by Monday due to the ongoing Middle East crisis.
They said the market is reacting to global crude oil price, exchange rate pressure and increasing cost of logistics.
The downstream regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had noted that fluctuations in petrol pump prices are a direct result of market dynamics under Nigeria’s deregulated downstream petroleum sector.
Over the weekend, the pump price of petrol was selling at over N1,000 at the various filling stations in Lagos, as against the initial average price of N939 per litre.
What they are saying
In an exclusive interview with Nairametrics, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said there is nothing oil marketers can do about the price increase, noting that it could have been worse if Nigeria was still importing the majority of its petroleum products needs.
- Explaining what is going on in the oil sector, Ukadike said, ‘’Well, we are seeing the drama now. The drama is too much, any moment from now, the pump price of petrol will be N1200 per litre.
- ‘’And it might be increased further. So, but the only good thing about this thing is that we have a refinery. We are no longer importing. Had it been we were importing, by now it could have been N1,500 per litre; it would have been worse. They would be scrambling for petroleum products. And once they’re scrambling for petroleum products, the price will go up.’’
Also, speaking, another oil marketer, Anwalu Ahmed, said the global and domestic pressures are currently affecting the supply chain in Nigeria’s petroleum sector, noting that instability in the Middle East is making traders factor in the risk of supply disruptions.
- Ahmed said, ‘’What we are currently seeing is a combination of global and domestic pressures affecting the petroleum supply chain in Nigeria. The downstream sector, which covers the importation, distribution and retailing of petroleum products, is highly sensitive to international crude oil prices, foreign exchange availability and logistics costs. Recently, global oil market uncertainty has increased, largely due to tensions in the Middle East, which is one of the most critical oil-producing regions in the world.
- ‘’When there is instability in the Middle East, the international price of crude oil and refined petroleum products rises because traders begin to factor in the risk of supply disruptions. Even if physical supply has not yet been affected, the market reacts immediately.’’
He pointed out that countries like Nigeria still partly depend on imported refined products, which means higher landing costs and more expensive product.
More insight
There were reports that there was a brief halt in the loading of petrol from the refinery, sparking speculation that there maybe further increase in the price of petrol with Brent crude trading at over $100 per barrel.
Meanwhile, some of the filling stations in Lagos were noticeably shut as they were not selling at all.
- When asked why the sudden increase in petrol price by marketers despite having old stock with lower prices, Ukadike said, ‘’Is there anything like old stock in oil and gas? Crude oil has increased by almost 50% . So, it’s supposed to expect that galloping price increase. The international crude oil price reflects the domestic usage and including the exchange rate. Well, thank God, now our exchange rate is stable”
The IPMAN spokesman said there is nothing marketers can do as petrol prices may increase further.
He, however, noted that petrol importation is not as it used to be due to the operations of the local refineries like Dangote Refinery.
- ‘’Wherever you are importing this product, the price of gasoline and petroleum products in Europe has risen up to 50%. And China is crying now that they are going to run out of crude oil,’’ he added.
On his own, Ahmed pointed out that what the country is witnessing is not just arbitrary pricing, but rather a reflection of market realities currency pressures and supply expectations.
- He said, ‘’The long-term solution is to strengthen local refining capacity, stabilise the naira and ensure a transparent and predictable downstream regulatory environment. Once those conditions are in place, price volatility in the Nigerian petrol market will reduce significantly.’’
Ahmed listed other measures the government can take to reduce the sharp rise in petrol price, including improving regulatory clarity and supply coordination so that marketers can have confidence to import products without uncertainty, temporary fiscal measures such as reducing certain port or logistics charges, to cushion the immediate impact on consumers.
What you should know
Nairametrics had a few days ago reported that the crude oil market had approached a tipping point, with Nigerian crude projected to hit $100 in the month of March.
Nigerian Bonny Light last traded above $90 a barrel, up by about a third this week.
The federal government’s revenue is expected to rise sharply, as the 2026 budget was set at a much lower $64.85 per barrel.
However, it was noted that Nigeria, being an importer of refined fuels despite Dangote’s refinery’s production uptick, will likely face high domestic fuel prices and inflation.
