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Nigeria tops Africa in petrol price surge during US-Iran war

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Nigeria recorded the sharpest increase in petrol price across Africa during the first half of 2026, with pump prices surging by 39.5 per cent as the Middle East conflict disrupted global crude oil supplies and exposed the country’s vulnerability to external market shocks despite growing domestic refining capacity.

The disclosure was contained in the Nigeria Half-Year Downstream Industry Report (January–June 2026) released on Tuesday by the Major Energies Marketers Association of Nigeria.

According to the report, the conflict involving Israel, Iran and the United States, which began on February 28, 2026, triggered widespread uncertainty in global oil markets, sending crude oil prices above $100 per barrel and sharply increasing the cost of transporting petroleum products worldwide.

The report explained that the temporary disruption of shipping through the Strait of Hormuz forced oil tankers to abandon the traditional route and sail around the Cape of Good Hope, more than doubling voyage time from about 18 days to nearly 40 days.

MEMAN stated, “During the first half of 2026, severe geopolitical tensions in the Middle East sparked immediate supply anxieties, injecting a heavy risk premium that drove international crude benchmarks past $100/bbl.

“This price surge was quickly compounded as the conflict bottlenecked traffic through the Strait of Hormuz, forcing maritime oil tankers to reroute around the Cape of Good Hope and stretching what is typically an 18-day voyage into a nearly 40-day journey.”

The association said Nigeria’s deregulated petrol market transmitted the global price shock directly to consumers, making the country the hardest hit in Africa.

It said, “Operating under a newly deregulated system, Nigeria experienced an immediate price transmission at the pumps. Data from the height of the crisis revealed that Nigeria recorded a 39.5 per cent gasoline price surge, the sharpest increase across Africa, more than doubling the price jumps seen in regional peers like Egypt (14.3 per cent).”

Despite the sharp rise in prices, the report said the period also marked a significant turning point in Nigeria’s downstream petroleum industry as local refining displaced imported fuel at an unprecedented pace.

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According to MEMAN, the expansion of the Dangote Petroleum Refinery significantly reduced Nigeria’s dependence on imported Premium Motor Spirit.

The report stated, “Against the backdrop of this intense price shock, the downstream sector achieved a significant structural shift away from import dependence toward domestic refinery supply, driven primarily by the operational scale-up of the Dangote Refinery, which by the review period accounted for the majority of local PMS supply.”

It added, “Premium Motor Spirit (PMS) local refining share expanded from 38.9 per cent in 2025 to 81.7 per cent over the review period. Concurrently, local units met an average of 64 per cent of diesel demand, while domestic gas processing facilities captured 90.5 per cent of the cooking gas market.”

However, the association warned that increased domestic refining had yet to eliminate Nigeria’s dependence on imported petroleum products. According to the report, local refinery production remained below national demand during critical periods between February and April, forcing regulators to approve fuel imports to prevent shortages.

MEMAN said, “However, the charts also highlight that domestic production alone was still structurally unable to fully bridge national demand, especially during peak periods. This supply-to-consumption deficit became visually evident between February and April, when the national consumption curve systematically crossed above domestic refinery output lines.”

It added, “To prevent severe product stockouts and stabilize the grid, the regulatory framework actively intervened by issuing refined product import licenses to selected marketers, a hybrid supply approach that successfully buffered fuel security during the worst of the international logistical shocks.”

The report further revealed that marketers drastically reduced fuel inventories because of soaring replacement costs, leading to a sharp decline in Nigeria’s strategic fuel reserves.

According to MEMAN, “The high-cost, volatile open-market environment forced aggressive realignments in inventory management across the value chain, as marketers optimized liquidity by drawing down physical buffers rather than holding expensive static wet stocks.”

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It added, “This structural shift caused national PMS stock sufficiency to drop progressively from 33 days in January to a low of 16 days by May, falling drastically short of the statutory 30-day safety benchmark, before recovering to roughly 20 days in June as licensed imports began filtering into the system.”

The marketers warned that the rapid depletion of fuel reserves highlighted the need for government-backed strategic petroleum reserves to cushion future global supply disruptions.

The report stated, “The rapid depletion of refined sufficiency days during the global shipping crisis underscored Nigeria’s lack of a resilient buffer, prioritizing the urgent downstream requirement to establish robust, state-backed Strategic Product Reserves and a dedicated Crude Oil Feedstock Reserve to insulate domestic refineries and consumers from sudden external supply chain closures.”

MEMAN also disclosed that persistently high fuel prices forced consumers to cut back on fuel purchases. It stated, “Furthermore, sustained open-market pricing triggered strong consumer demand elasticity, reducing average daily consumption by 22.3 per cent for PMS and 17.5 per cent for AGO.”

The association maintained that while Nigeria’s downstream reforms were beginning to yield results through higher domestic refining capacity, effective regulation would remain essential to sustain competition and protect consumers.

It added, “As domestic refining expands and the downstream sector evolves, sustained regulatory vigilance will remain essential to fostering fair competition, protecting consumers, strengthening investor confidence, and ensuring that the benefits of ongoing reforms are realised across the entire petroleum value chain.”

Under a section titled “Impact of the Middle East Conflict – Strait of Hormuz,” MEMAN said the conflict fundamentally altered global petroleum trade routes after the strategic waterway became temporarily inaccessible.

The report explained that suppliers increasingly shifted cargoes from the Persian Gulf to the U.S. Gulf Coast and West Africa as shipping companies sought safer alternative routes.

According to MEMAN, “The start of the conflict in the Middle East on 28th February 2026 and the subsequent temporary closure of the Strait of Hormuz significantly reshaped global crude oil and petroleum product trade flows during the first half of the year. Under normal market conditions, the Gulf serves as the primary export hub for refined petroleum products moving to Europe, Asia and parts of Africa.”

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It continued, “However, with access through the Strait severely restricted, cargoes were rerouted to alternative supply sources, particularly from the U.S. Gulf Coast and West Africa. The longer sailing distances, coupled with higher freight and insurance costs, increased delivered product costs and placed additional pressure on global shipping capacity.”

MEMAN further stated, “Under normal conditions, some Gulf-origin cargoes could reach key Asian markets in approximately 18 days via the Strait of Hormuz; however, rerouting around longer alternative routes extended voyage times to nearly 40 days, significantly delaying supply flows and increasing logistical costs. The disruptions reinforced the importance of diversified refining centers and demonstrated the growing strategic role of Atlantic Basin suppliers in maintaining global product availability during supply shocks.”

The first half of 2026 was one of the most volatile periods for Nigeria’s downstream petroleum sector since the full deregulation of the petrol market. Pump prices became fully responsive to movements in international crude oil prices, foreign exchange fluctuations, freight costs and supply chain disruptions following the removal of petrol subsidies.

Although the operational expansion of the 700,000-barrels-per-day Dangote Petroleum Refinery substantially reduced Nigeria’s reliance on imported petrol during the review period, local refining capacity was still insufficient to meet peak national demand, prompting the Nigerian Midstream and Downstream Petroleum Regulatory Authority to approve imports by selected marketers to maintain energy security.

The report underscores the opportunities and challenges of Nigeria’s transition to a market-driven downstream sector, where increased domestic refining has strengthened supply resilience but global geopolitical events continue to exert a significant influence on domestic fuel prices.

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DisCos earn N603bn as power offtake drops

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Electricity distribution companies collected N603.64bn from customers in the second quarter of 2026, despite a decline in the volume of electricity they received from the power market.

The figure was contained in the Nigerian Electricity Regulatory Commission’s second-quarter 2026 report, which showed that the average energy offtake by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in the quarter.

The Q2 figure represented a 112.45MWh/h, or 3.40 per cent, decline from the 3,309.48MWh/h average recorded in the first quarter. Despite the decline in offtake, the DisCos recorded an overall offtake performance of 94.07 per cent during the quarter, against available partially contracted capacity of 3,398.41MWh/h.

According to the report, the DisCos received a total of 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh. It stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”

The report further revealed that the naira value of electricity off-taken by the DisCos stood at N946.57bn, while the total value of energy billed to customers was N744.67bn.

This translated to a billing efficiency of 78.67 per cent, representing a decline of 0.57 percentage points from the 79.24 per cent recorded in the first quarter. At the collection stage, the DisCos recovered N603.64bn from the N744.67bn billed to customers, translating to a collection efficiency of 81.06 per cent.

The report said this represented an improvement of 2.11 percentage points from the 78.95 per cent recorded in Q1. However, the difference between the amount billed and the amount collected stood at N141.03bn during the quarter.

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The report also disclosed that the weighted average Aggregate Technical, Commercial and Collection losses across the 11 DisCos stood at 36.23 per cent in Q2.

It stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”

The 36.23 per cent loss, however, represented a 1.21 percentage-point improvement from the 37.44 per cent recorded in Q1.

The report noted that all the DisCos failed to meet their ATC&C targets during the quarter, with “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.

On market obligations, the report said the cumulative upstream invoice payable by the DisCos stood at N410.38bn in Q2.

The amount comprised N326.46bn for generation costs from the Nigerian Bulk Electricity Trading Company and N83.92bn for transmission and administrative services provided by the market operator.

The DisCos collectively remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator, leaving an outstanding balance of N24.94bn. This represented a market remittance performance of 93.92 per cent, slightly lower than the 94.08 per cent recorded in Q1.

The report added that the Federal Government had taken responsibility for about 50 per cent, or N321.26bn, of the total generation costs through subsidies arising from the freezing of end-use customer tariffs at the rates applicable in July 2024.

Meanwhile, three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during the quarter.

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This represented a remittance rate of 46.02 per cent. Domestic bilateral customers, on the other hand, paid N6.91bn against an invoice of N7.55bn, representing a remittance rate of 91.54 per cent.

Source: punchng.com

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Personal loans rise to N2tn as Nigerians borrow more

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Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026, as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, calculated from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month. The report covers developments in the real, fiscal, financial and external sectors of the economy.

The apex bank said consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

It said, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”

The CBN added, “Personal loans remained the dominant component of consumer credit, accounting for 64.78 per cent, while retail loans constituted 35.22 per cent.”

Based on the proportions reported by the apex bank, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans suggests that the balance rose by roughly N40bn during the period. Retail loans, which include credit tied more directly to the purchase of goods and services, recorded a slower increase of 0.90 per cent.

The figures show that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding credit.

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The increase came against a challenging operating environment for households and businesses. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index at 49.60 points, slightly higher than 49.40 points in April but still below the 50-point threshold separating expansion from contraction.

According to the bank, the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, which the CBN attributed to persistent cost pressures and higher energy prices. However, month-on-month inflation slowed to 1.75 per cent from 2.13 per cent.

The combination of rising consumer credit and weak consumer spending suggests that households were increasingly accessing credit at a time when living and operating costs remained under pressure.

A recent report Enhancing Financial Inclusion & Advancement noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The 2026 Access to Financial Services in Nigeria Survey revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

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Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

However, the report found significant distress among borrowers. About 45.8 per cent of formal-credit users reported some or serious repayment stress, while 83.8 per cent experienced ongoing financial stress.

Source: punchng.com

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NAFDAC seizes N300m banned drinks in Lagos

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The National Agency for Food and Drug Administration and Control has seized alcoholic beverages worth an estimated N300m packaged in sachets and PET bottles below 200ml during enforcement operations in Lagos State.

NAFDAC disclosed this in a statement shared on its Facebook page on Sunday, adding that some distributors and retailers involved in the sale of the prohibited products were arrested.

The agency said the enforcement operations were carried out at Ile-Epo Market, Ojuwoye Market in Mushin and Oke-Arin Market on Lagos Island.

“Officials evacuated several cartons of alcoholic beverages packaged in sachets and PET bottles below 200ml from these locations.

“Distributors and retailers were arrested during operations at Ile-Epo Market, while raids were also conducted at Ojuwoye Market, Mushin, and Oke-Arin Market, Lagos Island,” the statement said.

NAFDAC said investigations revealed that some distributors and retailers were hoarding the prohibited products amid increased demand and rising prices.

The agency said the enforcement was part of efforts to ensure compliance with the ban on the sale and distribution of alcoholic beverages packaged in sachets and PET bottles below 200ml.

It warned distributors, retailers and other operators against selling, distributing or hoarding the prohibited products.

“NAFDAC emphasises that the ban remains in force and warns distributors, retailers and other operators against the sale, distribution or hoarding of the prohibited products.

“The value of the seized products is estimated at N300m,” it stated.

PUNCH Metro reported on August 25 that NAFDAC ordered manufacturers of banned alcoholic beverages packaged in sachets and polyethylene terephthalate bottles below 200ml to recall the products nationwide or risk closure of their facilities.

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NAFDAC had also vowed to fully enforce the Federal Government-approved prohibition of alcoholic beverages packaged in sachets and PET or plastic bottles below 200ml, warning that the ban was irrevocable.

The agency had stated that the years of grace given to manufacturers by the Federal Government to stop producing the products had expired.

Source: punchng.com

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