The pump prices of Premium Motor Spirit (petrol) are nearing N1,400 per litre in many parts of the country as the United States and Iran fail to agree on a ceasefire that should lead to the reopening of the Strait of Hormuz.
As the crisis in the Middle East lingers, coupled with the exit of the United Arab Emirates from the Organisation of the Petroleum Exporting Countries on Tuesday, the prices of petrol have continued to rise.
From $105 per barrel on Monday, Brent crude jumped to $118 on Wednesday. As a result, the Dangote Petroleum Refinery jerked up its petrol gantry price from N1,200 to N1,275 per barrel.
Price data obtained from Petroleumprice.ng and confirmation from a Dangote refinery official on Wednesday revealed that the refinery raised its petrol loading price from N1,200 per litre to N1,275 per litre, while coastal supply prices climbed to N1,215 per litre.
Another source familiar with the situation disclosed that the refinery halted its pro forma invoice entry process at about 4 pm on Tuesday, effectively disrupting normal supply scheduling across its loading system. The suspension, according to the sources, led to an immediate stoppage of both petrol and diesel sales to marketers.
This is coming as the Nigerian National Petroleum Company Limited raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, according to a report by Oilprice.com.
The report stated that Nigeria was reaping the benefits of the US-Iran war, as the NNPC increased the price of its flagship grade, Bonny Light, by $6.13 per barrel for May compared to April. Similarly, Forcados was also raised by $7.01 per barrel.
“Nigeria reaps the benefits of the Iran war. Nigeria’s national oil company NNPC has raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, hiking its flagship grade Bonny Light by a whopping $6.13 per barrel compared to April, while Forcados is up by $7.01 per barrel,” the report stated.
The PUNCH had on Wednesday projected that the development might indicate that the Dangote Petroleum Refinery could pay more for crude, thereby pushing up fuel prices.
It was observed that filling stations wasted no time in moving up their pump prices from an average of N1,250 to over N1,300 per litre on Wednesday in Lagos and other states in the South-West. Checks by The PUNCH showed that filling stations in Lagos and Ogun states sold petrol at prices ranging from N1,315 to N1,350 as of Wednesday.
The NNPC filling stations at the Mowe/Ibafo axis of the Lagos-Ibadan Expressway sold petrol at N1,315 a litre, while Mobil offered N1,320.
The prices depend on the location. In the north and other locations far from the Dangote refinery, petrol prices were raised to around N1,400 per litre. People living in Ogun border communities said a litre of petrol is close to N1,700 because the Federal Government has not allowed the supply of petroleum products in their areas.
Speaking, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said prices may continue to soar unless US President Donald Trump allows peace to reign in the Middle East.
Gillis-Harry said fuel sellers have been subjected to sudden price volatility that makes business decisions somewhat difficult. He regretted that the Federal Government is not taking steps to support the masses despite making more gains from the high oil prices.
“This is what we have been introduced to, price volatility. And then the government is not making any statements about it, so it’s worrisome. At least, the government could come up with some measures. We are making some gains now on the price of crude oil. The government can give some back to reduce the cost of transportation, so food is not going to be expensive, along with a few other things. That’s what we have advised,” he said.
The PETROAN boss said the price of petrol could go above N1,500 per litre if the Middle East crisis is not de-escalated.
“If you go back to our predictions, I stated it there because Mr Trump is not very clear as to what he wants, in my opinion; if it is to decimate the Iranian nuclear facility or if it is to take over the crude oil as they are taking over Venezuela’s. I don’t think we know what he wants exactly. So we are not sure we are seeing the end of that crisis.
“You can see that the UAE has opted out of OPEC, and the speed at which they are opting out is very fast, which is why we have also advised that Nigeria should think out of the box and look at how production can be improved. It doesn’t need any rocket science; we have the reserves. It is to encourage investors and make sure that host communities are at peace and that violence is no longer the focus. The assets that were discovered in Bauchi and elsewhere, in which billions of dollars were invested, have not achieved anything.
“So we should pay attention to all those areas and increase our production value and production speed so we can at least clearly put 2 million barrels into domestic refining. That will be much better because we will then become a refining hub to guarantee jobs, improve businesses, and make our economy more active. People will work for reasonable money and pay better taxes without grumbling. That’s where we are,” he advised.
Gillis-Harry said the Dangote refinery showed its influence by changing prices at will, saying retailers will keep adjusting. “Dangote has increased the price again because he is the lord of the manor. So we will keep adjusting,” he added.
The PETROAN boss maintained that the NNPC oil price hike contributed to the petrol price increase, saying, however, that every single increase was a result of the closure of the Strait of Hormuz.
“Every single increase from any quarter is because we are not trading locally. All products in Nigeria are still internationally benchmarked. Regardless of whether we’re paying naira for crude for local refining, it’s still measured in the dollar equivalent. The only thing it has done is that you’re not going to scramble for forex to buy the crude that you’re going to refine here.
“We advise that that privilege should be extended to all refineries, be they modular or not, at least the refineries that are producing PMS or are about to produce,” he said.
A senior management official of the Dangote Group had revealed on Monday that the Dangote refinery had been subsidising the petrol and diesel it was selling to the Nigerian market.
According to the official, who spoke to our correspondent in confidence due to the lack of authorisation to speak, the company’s N1,200/litre ex-depot price for petrol was below the competitive market price, considering the jump in crude prices following the US-Iran war.
The PUNCH reports that the war in the Middle East triggered an oil price surge when the Strait of Hormuz was blocked by Iran. From $66 per barrel on February 28, Brent, the global benchmark for crude, jumped above $100 a barrel.
As a result, Dangote raised its petrol gantry price from N774 to N1,275 as of the time of filing this report. The oil price hike also affected diesel and aviation fuel.
In their reactions to the rising oil prices due to the US-Iran war, local refiners urged the Federal Government to drop the use of international pricing benchmarks for crude supplied to domestic plants, saying the current structure inflates costs and undermines local refining.
The spokesperson for the Crude Oil Refiners Association of Nigeria, Eche Idoko, said in an interview that the association had consistently pushed for a domestic pricing arrangement that reflects Nigeria’s peculiarities.
According to Idoko, crude supplied to local refineries should be priced based on locally designed pricing instead of using Brent as a benchmark.
“If you are using Brent to benchmark our pricing, the factors that are affecting the Brent pricing will still affect the price at which you are landing crude here. What we have always insisted on is that those elements in Brent that do not apply to the trade between the local refinery and the oil producers should be discounted. And like that, you get the actual cost of crude for local refineries,” he said.
An economist, Bismarck Rewane, said, “One of the options that can be explored is that the Federal Government of Nigeria agrees to sell crude at a particular price to the Dangote refinery with the assurance that the price of refined products does not increase.”
Energy economists have also called on the Federal Government to take steps towards assuaging the effects of rising fuel prices on the masses. However, the government has yet to respond to the calls even as inflation figures rise again.
US doubles down on Iran
Meanwhile, the US continues to seek to pile pressure on Iran with the naval blockade outside the Strait of Hormuz as the Trump administration signals the blockade is yielding results and will not be lifted anytime soon, Oilprice.com reports.
“While the surviving IRGC leaders are trapped like drowning rats in a sewage pipe, Iran’s creaking oil industry is starting to shut in production, thanks to the US blockade,” US Treasury Secretary Scott Bessent said in a post on X on Tuesday.
“Pumping will soon collapse. Gasoline shortages in Iran next!” Bessent added.
In another post, the secretary wrote that “Kharg Island, Iran’s primary oil export terminal, is soon nearing storage capacity, which will force the regime to reduce oil production, resulting in an additional approximately $170m per day in lost revenue and causing permanent damage to Iran’s oil infrastructure.”
“Treasury will continue to exert maximum pressure, and any person, vessel, or entity facilitating illicit flows to Tehran risks exposure to US sanctions,” Bessent added.
US President Donald Trump has instructed aides to prepare for an extended blockade of Iran, US officials told the Wall Street Journal earlier this week.
The President preferred to keep the blockade and try to choke off Iran’s oil exports and revenues to the other options, such as renewing bombing of Iran or walking away from the war, the officials told the Journal.
Meanwhile, at least six Iranian tankers laden with oil are loitering in a cluster near the port of Chabahar in Iran, outside the Strait of Hormuz but just inside the US naval blockade line, satellite images and maritime intelligence analyses have shown.
The cluster of about half a dozen Iranian vessels signals that Iran continues to load oil on Iranian tankers that are trying to leave the Middle East region. On the other hand, the piling up of ships outside the Strait of Hormuz but inside the US blockade line suggests that the American interception of vessels is working to at least delay Iranian oil exports.
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