Petrol Prices Face Fresh Pressure as Crude Oil Rally and Market Tensions Intensify
Mounting pressure in the global oil market is beginning to filter through Nigeria’s downstream sector, raising concerns that the pump price of Premium Motor Spirit (PMS), commonly known as petrol, could climb as high as N1,000 per litre in the days ahead. The renewed anxiety follows a sharp rise in international crude oil prices, driven largely by escalating geopolitical tensions in the Middle East.
Global oil prices crossed the $70 per barrel mark during the week, reaching their highest levels in about five months. Brent crude, the global benchmark, surged on Thursday amid fears that supply disruptions could occur if the United States takes military action against Iran, one of the largest crude oil producers within the Organisation of Petroleum Exporting Countries (OPEC). The price rally has heightened uncertainty across energy markets, with direct implications for fuel-importing and refining economies such as Nigeria.
According to Reuters, Brent futures jumped by $2.31, or 3.4 per cent, to settle at $70.71 per barrel, while US West Texas Intermediate (WTI) gained $2.21, or 3.5 per cent, closing at $65.42. Data from oilprice.com showed further gains by Friday afternoon, with Brent settling at $70.89 per barrel and WTI at $65.80, underscoring the sustained upward momentum. Analysts noted that Brent crude’s rise is particularly significant, as it serves as the pricing benchmark for refined petroleum products globally.
Reuters also reported that the heightened US-Iran tension pushed both crude benchmarks into technically overbought territory. Brent closed at its highest level since July 31, while WTI reached its strongest close since September 26. Market anxiety has been fuelled by reports that US President Donald Trump is weighing several options against Iran, including targeted strikes on security forces and key leaders, even as Israeli and Arab officials cautioned that air power alone may not be sufficient to destabilise Tehran’s leadership.
Developments within Iran have added to the sense of volatility. Reports indicated that plainclothes security forces carried out mass arrests across the country in a bid to suppress protests, further raising the risk of regional instability. Analysts have warned that any retaliatory action by Iran could have far-reaching consequences for global oil flows.
“The immediate market concern is the collateral damage if Iran takes a swing at its neighbours or, possibly even more tellingly, if it closes the Strait of Hormuz to the 20 million barrels per day of oil that navigate it,” PVM analyst John Evans said. Iran ranked as the third-largest crude producer in OPEC in 2025, behind Saudi Arabia and Iraq, according to data from the US Energy Information Administration.
Against this backdrop, Nigerian fuel marketers say the rising crude prices could soon translate into higher pump prices. Speaking with our correspondent, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, warned that unless crude oil prices retreat, petrol prices in the domestic market would come under significant pressure.
Ukadike explained that crude oil prices and exchange rates remain the dominant determinants of PMS pricing in Nigeria. Any adverse movement in either, he said, directly affects the cost at which petroleum products are sold locally. According to him, if the current surge in crude prices persists, petrol could sell for as much as N1,000 per litre, particularly in areas far from refineries and major fuel depots.
“As an independent marketer, we don’t normally want the price of petroleum products to go up. Any increase you see now will be because of international manoeuvres and everything happening in the global community in terms of crude oil prices,” he said. “The crude surge will definitely affect our local market. The price of petroleum products will come down if the crude price goes down—that’s the common principle of the market.”
He added that the rising cost of petrol is also placing strain on marketers’ purchasing power. “Crude oil is important in refining petroleum products; once it goes up, the prices of petroleum products will also go up. We are gearing towards that. The only problem is that it is giving us pressure because too much naira is now pursuing a few litres of petroleum products,” Ukadike noted.
The higher prices, he said, are already affecting consumer behaviour. Petrol sales have slowed compared to the December festive period, as households and businesses cut back on consumption in response to rising costs. “People were filling their tanks then when prices were lower, but now they are becoming conservative because of the price increase,” he said.
Another dealer, a major oil marketer and PMS importer, corroborated these concerns, stating that the landing cost of petrol could exceed N900 per litre if crude prices continue their upward trend. Speaking on condition of anonymity, the dealer said funding pressures are already mounting for importers due to higher supplier prices linked to the Middle East crisis.
“So N1,000 per litre is not far from the range,” the importer said. “Petrol sold around that price before when crude was hovering around $75 per barrel and the exchange rate was slightly higher than what we have now. This is purely market dynamics.”
The warning comes amid recent price adjustments by the Dangote Petroleum Refinery. Earlier in the week, the refinery raised its petrol price from N739 to N839 per litre, following an earlier increase at the gantry from N699 to N799 per litre. The latest gantry price is now about N70 higher than the landing cost of imported PMS. Findings showed that marketers who had completed payments at N699 per litre were asked to top up to N799 before loading, after the refinery withdrew its temporary festive price support and invalidated previously issued loading authorisations.
Following these adjustments, filling stations across the country have revised their pump prices. In Lagos, petrol prices ranged between N830 and N859 per litre. The Nigerian National Petroleum Company Limited sold PMS at N849 per litre on Friday, while MRS filling stations, a Dangote partner, sold at N839. A few outlets displayed slightly lower prices than MRS.
Amid the pricing concerns, the Dangote refinery has reiterated its capacity to stabilise domestic fuel supply. In a statement issued on Thursday, the refinery said it can supply 75 million litres of petrol daily, significantly higher than Nigeria’s estimated daily consumption of 50 million litres. It also stated that it can supply 25 million litres of Automotive Gas Oil (diesel) daily against estimated demand of 14 million litres, as well as 20 million litres of aviation fuel per day, far exceeding the estimated domestic requirement of four million litres.
According to the refinery, supplying volumes above national demand provides critical buffers, enhances market stability, and reduces dependence on imports, particularly during periods of logistical disruption or peak demand. The company reaffirmed its commitment to regulatory compliance and ongoing collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The refinery said it remains fully engaged with regulators and industry stakeholders in support of Nigeria’s energy security objectives, as the country continues its transition from fuel import dependence to domestic refining. It added that expanded local refining capacity positions Nigeria to reduce foreign exchange exposure, strengthen supply security, and improve downstream efficiency through locally refined petroleum products.
Despite these assurances, market participants say the trajectory of global crude prices will remain a key factor in determining whether Nigerians face another sharp increase in petrol prices in the near term.