Fresh Petrol Price Hikes Hit Nigeria as US-Iran Conflict Drives Crude to $76.48

Nigerians should brace for higher petrol prices in the coming days as global crude oil markets reversed recent gains following renewed hostilities between the United States and Iran. Brent crude surged more than 3% on Wednesday, reaching $76.48 per barrel as of 06:30 GMT, the highest level since June 23, and independent fuel marketers in Nigeria have already begun revising pump prices upward as depot loading costs climbed.

US Strikes and Sanctions Trigger Oil Price Spike

The market reacted sharply to US military strikes on Iran and Washington's decision to withdraw a temporary sanctions waiver on Iranian oil exports. This followed attacks on three commercial vessels in the Strait of Hormuz, which American, Qatari, and Saudi officials attributed to Iran. US Central Command announced it had commenced launching a series of powerful strikes against Iran to impose heavy costs for targeting commercial shipping crewed by innocent civilians in an international waterway.

Iran's Deputy Foreign Minister Kazem Gharibabadi denied that revoking the waiver was legitimate, calling it a blatant violation of a memorandum of understanding signed between Washington and Tehran on June 17. He pledged that Tehran would take decisive actions in defence of its interests. Tehran has not directly claimed responsibility for the vessel attacks.

Dangote Refinery Absorbs Cost, Warns of Volatility

Dangote Petroleum Refinery revealed it had absorbed significant crude cost increases to shield Nigerians from rising prices. The refinery disclosed that its average landed cost of crude was approximately $124.80 per barrel in May and $95.25 per barrel in June, against the current international benchmark of around $71.01 per barrel. The refinery noted that crude is procured weeks or months before processing under contracts tied to monthly average pricing mechanisms rather than daily spot rates, meaning current market movements do not immediately translate into product pricing. It added that despite these elevated feedstock costs, prices of petroleum products in Nigeria are still lower than prices in neighbouring countries even after adjusting for taxes.

Major marketers are now monitoring market conditions closely before committing to further adjustments. This marks a reversal from the widespread price reductions seen in recent weeks, when lower global crude prices allowed refiners and depot operators to cut ex-depot rates, with many filling stations passing those savings on to consumers.

Local Refining Key to Long-Term Stability

Olatide Jeremiah, Chief Executive of Petroleumprice.ng, told Legit.ng that Nigeria's deregulated downstream market is now directly exposed to shifts in international crude prices, foreign exchange rates, logistics costs, and supplier competition. He argued that stronger investment in local refining capacity offers the most durable protection against external shocks, stating: The only way to mitigate fuel prices being at the mercy of oil price is our local refineries should be given full priority to Nigerian crude, if not, oil shocks will keep influencing our local prices and markets.

Earlier, Dangote Petroleum Refinery reduced the price of Automotive Gas Oil (diesel) at the gantry by N100 to N1,600, providing hope for a drop in transport, logistics, and manufacturing costs in Nigeria. The latest adjustment followed an earlier reduction of petrol prices by N75 for marketers. Analysts said the cut is expected to fuel a new wave of price competition in the downstream market, with depot prices having been high recently.

For Nigerian consumers and businesses, the immediate impact is clear: petrol prices are likely to rise again, reversing the brief relief seen in recent weeks. With the downstream market now directly tied to global crude volatility, the naira faces additional pressure as import costs climb, and transport and logistics costs may follow suit.