Nigerians Brace for Further Petrol Price Hike as Global Crude Oil Surge Continues

Nigerians are facing the prospect of another increase in the price of petrol following a sustained rise in global crude oil prices. Nigeria’s Bonny Light crude has risen to $70.30 per barrel, a 10% increase from the previous week, with similar hikes seen in benchmark Brent crude.

This surge has already triggered a 14.3% increase in the ex-depot price from the Dangote Refinery, from N699 to N799 per litre, causing retail stations to adjust pump prices to an average of N850 per litre.

Industry analysts attribute the crude price spike to declining US inventories and geopolitical tensions, including US threats against Iran, and warn of resulting higher transport, production, and general living costs in Nigeria.

Key Points

The impending hike will further erode the purchasing power of consumers and businesses, exacerbating the existing cost-of-living crisis.
It will increase operational costs across all sectors, particularly for SMEs reliant on generators, fueling broader inflationary pressures.
While the government may see increased oil revenue, households and businesses bear the immediate brunt of higher energy and logistics costs.
The situation highlights the extreme vulnerability of Nigeria’s deregulated fuel market to volatile global crude prices and geopolitical shocks.
The timing, following a recent price adjustment, demonstrates the rapid transmission of international market turbulence to local pump prices, leaving little breathing room for the economy.

The direct link between global crude prices and local fuel costs ensures that Nigerian consumers will continue to feel the pinch of international market volatility, with no immediate relief in sight.

Sources: Vanguard, Punch