Israel-Iran Conflict? - Fuel Prices Near N1,000 Per Litre as Global Crude Tensions Ripple Across Nigeria’s Economy

 

Petrol prices have surged across Nigeria, with many filling stations now selling Premium Motor Spirit (PMS) at nearly N1,000 per litre. The spike in fuel costs comes as global crude oil prices rise sharply, triggered by ongoing hostilities between Israel and Iran that have unsettled oil markets and investors worldwide.

From Lagos to Abuja and Kano, motorists are feeling the financial pressure, as filling stations adjust their pump prices in response to global oil dynamics. The rapid rise in prices has already started to affect transportation fares and the daily operations of businesses and households.

The Israel-Iran conflict has caused significant disruptions in global oil supply chains. Brent crude, a major international benchmark, climbed by over 11 percent, moving from $66.45 to $74.23 per barrel, with an intraday peak of $78.50. West Texas Intermediate (WTI), the US benchmark, jumped over 14 percent to reach $77.62 per barrel. These increases mark the highest price levels since January and reflect mounting fears of a broader regional escalation.

Analysts have warned that any retaliation from Iran, especially following recent US airstrikes on nuclear facilities, could send oil prices soaring even further. Iran, as the third-largest oil producer in the region, contributes significantly to global oil supply. A disruption in its output or a closure of the Strait of Hormuz could lead to major supply shortages worldwide.

While Nigeria stands to benefit from higher oil export revenues, the domestic consequences are severe. Despite being a crude oil producer, the country relies heavily on imported refined products or private sector refiners, whose operations are tied to global pricing.

A significant factor in the recent fuel price adjustments is the change in ex-depot pricing by Dangote Refinery and Petrochemical Limited. The refinery increased its gantry price from N825 to N880 per litre. Following this, affiliated stations such as MRS and AP in Lagos revised their pump prices upward to N925 and N910 respectively.

However, not all stations have updated their displayed prices. Some are still showing old rates such as N870 while actually selling at higher prices, leading to confusion and frustration among consumers. Motorists have complained about being misled by price boards, only to discover inflated prices at the pump.

In Abuja, major independent marketers like Mobil, A.A Rano, and Eternal are now selling PMS at N955 per litre. Others, like NIPCO along Airport Road, have raised prices to N950. Commercial drivers say they are buying less fuel due to limited funds, and many are anticipating further fare increases if prices continue to climb.

In Kano, prices have hit N960 per litre at some stations such as Fara-fara and Oribi. MRS Oil, known for selling Dangote-refined products, has set its price at N945. Long queues were observed at stations offering relatively lower rates. Meanwhile, several filling stations along major roads remained closed, possibly due to supply challenges or hesitation to sell at current high prices.

Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained that the price surge is a direct result of rising crude prices and exchange rate volatility. He said Dangote Refinery, despite being based in Nigeria, cannot operate outside global market realities.

Economic expert Dr. Muda Yusuf noted that while higher oil prices improve Nigeria's foreign exchange inflows and reserves, they also push up the cost of fuel and related products such as diesel, jet fuel, and gas. He added that this situation affects both businesses and consumers, potentially slowing economic recovery and growth.

Dr. Dauda Garuba, a policy analyst in the oil and gas sector, warned that while the government may earn more revenue from crude sales, the benefits may be eroded by inflation and a spike in the cost of living. According to him, the deregulated fuel market means Nigerians will continue to bear the brunt of any increase in global oil prices.

Transport operators are already adjusting fares to cope with the rising cost of fuel. Drivers like Aluko Taiwo in Lagos report that fares have increased from N300 to N400 on some routes, prompting complaints from passengers. Many transporters say they have no choice but to raise prices to remain in business.

Nigerians are being advised to prepare for further increases in petrol prices if geopolitical tensions remain unresolved. Analysts suggest that unless there is a diplomatic breakthrough in the Middle East, crude prices could remain high for an extended period.

As oil remains the backbone of Nigeria’s economy, any fluctuation in global prices continues to have immediate and far-reaching impacts on local fuel costs, household budgets, and the wider economy. The government is under increasing pressure to intervene, with stakeholders urging authorities to consider discounts on local sales or other relief measures to cushion the effects on citizens.