Nigerians may soon face an increase in petrol prices as global and local market conditions drive costs higher. Market analysts predict that fuel prices could climb close to N900 per litre, primarily due to new U.S. sanctions on Iran and changes in Dangote Refinery’s pricing policy.
Global Factors Driving Price Hike
The recent sanctions imposed by the United States on Iran have disrupted the global oil supply chain, leading to a rise in crude oil prices. Brent crude, which serves as Nigeria’s benchmark, has surged to $72.16 per barrel, up from $71.75 just days prior.
Analysts believe the sanctions, which target entities purchasing Iranian crude, including a Chinese refinery, have further tightened supply, increasing the price of oil worldwide. With Iran producing over three million barrels per day, the impact of these sanctions is expected to ripple across the global energy market.
Dangote Refinery’s Dollar-Pegged Sales Policy
On the domestic front, Dangote Refinery’s recent decision to suspend the sale of petroleum products in naira has further influenced fuel pricing in Nigeria. The refinery, which had previously adjusted its prices downward three times this year, has now pegged its sales to the U.S. dollar.
According to Dangote Group, this move was necessary to prevent revenue mismatches, as crude oil procurement remains dollar-denominated. The company explained:
“Our sales of petroleum products in naira have exceeded the value of naira-denominated crude received. As a result, we must temporarily align our sales currency with our crude procurement currency.”
This policy shift means Nigerian fuel importers and marketers will have to purchase products at global market rates, making local fuel prices even more susceptible to fluctuations.
Depot Price Adjustments and Market Impact
With these changes, fuel depots across Nigeria have already adjusted their loading prices upwards. Petrol prices at major depots, including Matrix Warri, Zamson, Rainoil, Pinnacle Warri, and Sobaz, climbed from N852 to N875 per litre within a single day.
Market analysts at J.P. Morgan project that Brent crude prices will remain in the mid-to-high $70 range, which could further push Nigerian fuel prices above N900 per litre.
Oil Marketers Respond to Pricing Speculations
Amid the growing concerns, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has denied reports that it opposed the recent fuel price reductions by Dangote Refinery and the Nigerian National Petroleum Corporation Limited (NNPCL).
While some reports suggested that marketers were unhappy with the losses incurred due to fluctuating fuel prices, IPMAN clarified that its members remain committed to ensuring stable and fair pricing for consumers.
As global crude oil prices continue to rise and local market dynamics shift, Nigerians may need to brace for another round of fuel price increases in the coming weeks.
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