Abuja faces possible N1,500 pump price as rising crude oil, freight and distribution costs deepen pressure on consumers and businesses
Consumers, transport operators and businesses across Nigeria are bracing for another round of rising costs following a fresh increase in the wholesale price of petrol by Dangote Petroleum Refinery.
The refinery increased its Premium Motor Spirit, PMS, also known as petrol, gantry price by N85, or 6.7 per cent, from N1,265 to N1,350 per litre, with effect from September 12, 2026.
The latest adjustment is expected to have its most pronounced effect in inland markets, particularly Abuja and cities across northern Nigeria, where petroleum products attract additional transportation and distribution costs after leaving coastal supply centres.
In a memo to its customers, the refinery announced the revised pricing, stating: “Dear valued customer, please find below the revised DPRP PMS gantry and coastal price, which is effective September 12th, 2026.”
The refinery also directed customers with existing loading arrangements to return their Automated Truck Certificates, ATCs, for repricing.
It said: “You are advised to return all ATCs for repricing and a new volume contract will be issued for immediate loading resumption.”
The latest increase is expected to raise the acquisition costs of marketers purchasing petrol from the refinery, potentially forcing operators to review pump prices to reflect higher replacement and distribution costs.
Abuja, northern cities face steeper prices
Industry projections indicate that motorists in Abuja could soon pay between N1,400 and N1,500 per litre, with some filling stations potentially selling above N1,500, depending on their supply costs, location and profit margins.
The pressure is expected to be more severe in northern cities located farther from coastal supply points.
Petrol prices in Kano, Kaduna, Jos and other inland markets could rise to between N1,450 and N1,600 per litre, depending on product availability, transportation expenses and the routes used to move supplies.
The widening price differential between coastal and inland markets reflects the growing importance of logistics in Nigeria’s deregulated downstream petroleum market.
While Lagos, Port Harcourt and Warri have comparatively easier access to refineries, terminals and other petroleum supply infrastructure, Abuja and many northern markets rely heavily on products transported over long distances by road.
That geographical disadvantage means that increases in trucking, freight, diesel and other distribution expenses are ultimately passed through the supply chain to consumers.
The latest Energy Bulletin by the Industry Competency Centre, Lagos, showed that the seven-day average Brent crude price stood at $98.74 per barrel, while Bonny Light averaged $104.65 per barrel.
The seven-day average exchange rate was N1,323.12 to the dollar.
The bulletin also put the seven-day average domestic petrol price at N1,308.33 per litre and diesel at N1,855.97 per litre.
With coastal ex-depot petrol prices currently ranging from N1,265.50 to N1,285 per litre, inland markets are expected to record significantly higher prices once trucking and other distribution costs are added.
Diesel adds to business pressure
The pressure is not limited to petrol.
Diesel prices remain elevated, creating another major challenge for businesses that depend on generators, commercial vehicles and other diesel-powered equipment.
According to the Energy Bulletin, Lagos diesel ex-depot prices ranged between N1,790 and N2,100 per litre. Inland prices could therefore rise to between N2,100 and N2,400 per litre or even higher after transportation and distribution costs are factored in.
For manufacturers, logistics companies, farmers, retailers and small businesses, the combination of higher petrol and diesel prices could translate into increased operating costs and lower profit margins.
The situation could become more difficult if crude oil prices remain above $100 per barrel, the naira loses further value or transportation costs continue to rise.
On the other hand, a sustained decline in international crude prices, a stronger naira and lower logistics expenses could ease some of the pressure on petroleum prices.
Oil price, freight rate spikes challenge refineries — Expert
Reacting to the development in an interview with Sunday Vanguard, Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, said the latest increase was a reflection of developments in the international oil market.
He said: “Oil price and freight rate spikes are universal challenges for refineries, except where the Federal Government intervenes. Gantry and pump prices will ultimately be determined by the impact of the Middle East crisis.
“The upward review of petrol prices to N1,350 per litre by the Dangote Refinery is expected as oil prices approach $110 per barrel.
“Pump prices could hit N1,500 per litre in major cities across Nigeria if the crisis persists.”
Jeremiah's warning highlights the vulnerability of domestic petroleum prices to developments beyond Nigeria's borders, particularly movements in crude oil prices, international freight rates and geopolitical tensions affecting global energy supplies.
High fuel prices mean hardship for Nigerians — OGSPAN
Vice President of the Oil and Gas Service Providers Association of Nigeria, OGSPAN, Lawal Kamaldeen, said the latest increase would place additional pressure on households and businesses already dealing with elevated living and operating costs.
He said: “The N85 increase represents approximately 6.7 per cent, while the refinery’s cumulative increase since August 21 has reached N185 per litre, representing about 15.9 per cent. The latest adjustment comes at a particularly difficult time for Nigerian households and businesses, which are already facing significant increases in the cost of living and doing business.
“We recognise that Dangote Refinery is operating in a market increasingly affected by international crude oil prices, product replacement costs and geopolitical disruptions arising from the conflict involving Iran and the United States. Recent developments in the international oil market have created genuine cost pressures for refiners and petroleum marketers.
“However, from the perspective of the domestic economy, we are concerned about the likely consequences of another increase in the cost of petrol.”
Kamaldeen said petrol remained a critical input across virtually every segment of the Nigerian economy, meaning that an increase at the wholesale level was likely to spread through the downstream value chain.
“Petrol remains a major input for transportation, distribution, agriculture, small businesses and general economic activity in Nigeria. An increase in the wholesale price will inevitably create pressure across the downstream petroleum value chain,” he said.
He identified likely consequences as higher transportation and logistics expenses, increased costs of moving food and agricultural produce, rising prices of essential goods and services, higher operating expenses for small and medium-sized businesses and increased school transportation costs.
He also warned of broader inflationary consequences as businesses pass higher energy and logistics expenses to consumers.
Rather than returning to a broad, import-based fuel subsidy regime, Kamaldeen proposed a targeted intervention focused on supporting domestic production.
“Such an intervention could include increasing the allocation of crude oil to qualified domestic refineries at competitive terms, particularly during periods of exceptional international price volatility,” he said.
He further called for a review of applicable taxes, levies and government charges on locally refined petroleum products where necessary.
According to him, government should establish a transparent and time-bound framework for supporting domestic refining, with assistance tied to actual production and supply.
Kamaldeen added that any government intervention should be independently monitored and subjected to clear performance benchmarks.
FG urged to tackle rising transport, food costs
Executive Director of Spaces for Change, Victoria Ibezim-Ohaeri, also warned that sustained increases in petroleum prices could deepen financial pressure on households and businesses.
She said: “For households, the most immediate concern is likely to be higher transportation and food costs. Higher fuel and logistics costs can raise the cost of moving people and goods, while households and businesses that rely on petrol- or diesel-powered generators may face additional energy expenses.
“These pressures could further reduce purchasing power, particularly for low- and middle-income households. Nigeria’s headline inflation rate currently stands at 15.43%, while food inflation is 20.31%, according to the National Bureau of Statistics.
“Businesses across manufacturing, agriculture, construction, retail and logistics are similarly exposed to higher energy, transportation and input costs.
“If the shock persists, firms may pass additional costs on to consumers, absorb lower profit margins, postpone investment or reduce employment. Consequently, a prolonged oil-price shock could constrain the recovery of the non-oil economy even as the oil sector benefits from higher crude prices.
“In the coming weeks, volatility is likely to remain the central concern. Continued conflict and disruption to major shipping routes could keep crude and refined petroleum prices elevated. Recent disruptions have already reduced oil flows through the Strait of Hormuz and contributed to higher shipping and fuel costs.”
Ibezim-Ohaeri urged the Federal Government not to view higher crude prices solely as an opportunity for increased government revenue, arguing that the additional income should also be deployed to protect vulnerable households and economic sectors.
She added: “Nigeria should therefore avoid treating the current price increase simply as a revenue windfall. First, government should preserve part of any additional oil revenue as fiscal and external buffers rather than immediately expanding recurrent expenditure.
“Second, support should be targeted at households and sectors most exposed to the shock. This could include temporary expansion of well-targeted cash transfers, transport support and measures that reduce the cost of moving food from farms to markets. Support for agricultural production, storage, irrigation and affordable financing should also be prioritised to reduce the risk that higher energy and transport costs translate into further food-price increases.
“Third, government should accelerate measures that reduce Nigeria’s exposure to petroleum-price volatility. Greater domestic gas utilisation, more reliable electricity, renewable energy, efficient transport systems and improved logistics can reduce the cost of energy across the wider economy.”
Cost shock could weaken economic recovery
Earlier, economist and communications expert Clifford Egbomeade told Sunday Vanguard that the immediate consequence of higher crude oil prices would be a cost shock across the wider economy.
“The immediate effect on Nigeria is a cost shock. Higher crude prices will raise the cost of diesel, transport, freight and other energy-intensive inputs, putting pressure on business margins and household incomes,” he said.
The latest petrol price adjustment therefore comes at a sensitive point for the Nigerian economy, with businesses and households facing the possibility of higher transportation, food, energy and operating expenses.
For consumers, the biggest concern is the speed with which the increase could filter into everyday expenses. For businesses, the challenge is whether higher energy and logistics costs can be absorbed without significant increases in the prices of goods and services.
For the Federal Government, the latest development underscores the continuing challenge of protecting consumers from global petroleum-price shocks while maintaining a deregulated downstream market and supporting the growth of domestic refining.
With crude prices remaining elevated and geopolitical tensions continuing to threaten global energy and shipping routes, the direction of petrol prices in the coming weeks will depend largely on international oil prices, exchange-rate movements, domestic refinery output, transportation costs and the availability of petroleum products.
For millions of Nigerians, however, the immediate concern remains the same: whether another increase in the price of fuel will translate into another increase in the cost of living.