Energy experts and downstream operators have cautioned that Nigeria could be on the brink of another round of petrol and diesel price increases if global crude oil prices climb beyond the $90 per barrel mark amid rising tensions between the United States and Iran.
The warning follows renewed volatility in the international oil market, triggered by escalating hostilities in the Middle East. Analysts say the unfolding crisis has already injected fresh uncertainty into global energy supply chains, heightening concerns about the stability of Nigeria’s domestic fuel pricing structure despite ongoing efforts to deepen local refining capacity.
Across major Nigerian cities, petrol prices currently range between N824 and N880 per litre, depending on location, transportation costs, and individual marketer pricing strategies. The present pricing regime comes after a recent adjustment by the Dangote Petroleum Refinery, which reduced its Premium Motor Spirit (PMS) gantry price by N25 per litre, lowering the ex-depot rate from N799 to N774 per litre in February 2026. While the reduction offered temporary relief to marketers and consumers, experts warn that any sustained spike in crude oil prices could quickly erase those gains.
Market watchers note that tensions between Washington and Tehran have renewed fears of supply disruptions, particularly around the Strait of Hormuz — a strategic maritime corridor linking the Persian Gulf to the Indian Ocean. The narrow waterway handles a substantial share of global crude oil shipments, and any interruption to tanker movements in the region is widely regarded as capable of triggering supply shocks and sharp price increases.
Over the weekend, global oil prices jumped by roughly 10 per cent following reports that several international oil companies suspended tanker operations near the Strait amid security concerns. Although prices later moderated, the upward movement underscored the sensitivity of the market to geopolitical risk.
As of late Sunday, Brent crude traded at $72.87 per barrel, while West Texas Intermediate stood at $67.02. Nigeria’s Bonny Light crude was priced at $78.62 per barrel. Analysts caution that if hostilities intensify or persist, prices could edge closer to the $90 threshold — a level that industry stakeholders say would have significant implications for Nigeria’s fuel market.
Industry executives point out that Nigeria remains heavily exposed to global crude pricing dynamics because a substantial portion of the feedstock processed by the Dangote Refinery is sourced from international markets. Although the refinery receives crude allocations from the Nigerian National Petroleum Company Limited (NNPCL), experts estimate that imported barrels still account for a significant share of its monthly processing volume.
This reliance on imported crude means that any surge in international prices would directly impact refining costs. A sharp increase in crude prices would force refiners to adjust their cracking margins — the difference between the cost of crude and the price of refined products — potentially leading to higher pump prices for petrol and diesel.
Beyond crude costs, shipping expenses are also rising. Protection and indemnity (P&I) clubs — insurers that provide coverage for maritime risks — have reportedly raised war-risk premiums for tanker vessels operating near the Gulf. The higher insurance costs are expected to increase freight charges, adding another layer of expense to crude imports and refined product distribution.
Energy analysts argue that if crude prices breach the $90 per barrel mark, refiners may have little choice but to revise their pricing templates to reflect higher input and logistics costs. Such adjustments would likely cascade through the supply chain, ultimately affecting consumers.
The situation has also reignited scrutiny of the Federal Government’s naira-for-crude arrangement with domestic refiners. While authorities maintain that crude supplies are provided under the swap mechanism, some industry observers question the transparency surrounding the volumes allocated and the corresponding output of refined products. Calls for clearer accounting and reporting have grown louder as stakeholders seek assurances that local refining capacity can shield the country from global price swings.
Despite being Africa’s largest crude oil producer and home to the continent’s biggest refinery — one of the largest globally — Nigeria continues to grapple with vulnerability to international market shocks. Analysts say that in an ideal scenario, higher global crude prices should not necessarily translate into higher domestic fuel costs, particularly in a country with substantial production capacity and refining infrastructure. However, the interplay of import dependence, logistics costs, exchange rate pressures, and market-based pricing mechanisms means global developments still exert significant influence on local pump prices.
As geopolitical tensions simmer and traders monitor developments in the Middle East, Nigerian consumers and businesses remain on edge. Many fear that a sustained escalation could drive up transportation costs, food prices, and overall inflation, compounding existing economic challenges.
For now, industry players are closely watching the trajectory of crude prices and diplomatic efforts to ease tensions. But the consensus among experts is clear: if global oil prices surge toward or beyond $90 per barrel and remain elevated, Nigeria’s fuel market is unlikely to remain insulated from the impact.
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