Crude Oil Rally Puts Petrol and Diesel Prices Under Fresh Pressure

Global crude oil prices have climbed to nearly $110 per barrel, raising fresh concerns that Nigerians could pay more for petrol and diesel. The rally threatens higher energy costs for businesses and households, with knock-on effects on transport, food and other essential products.

Brent crude rose 3.72% to $109.90 per barrel, US West Texas Intermediate gained 3.51% to $101.40 and Murban crude increased 3.08% to $113.40 per barrel, Oilprice.com data showed. The increases followed escalating geopolitical tensions and attacks on energy infrastructure, fuelling concerns about possible supply disruptions.

Refiners warn of feedstock costs

Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), Eche Stephen Idoko, said rising crude prices could increase government earnings but also raise production and living costs. He explained that higher crude prices increase the cost of feedstock for local refineries, meaning domestic refining alone cannot shield consumers from global market movements.

Idoko added that the naira-for-crude arrangement addresses the currency used for payment but does not necessarily lower the underlying cost of crude oil. He called for commercially sustainable crude supply arrangements that reduce unnecessary logistics, financing and transaction expenses for local refiners.

According to him, sustained increases in crude prices could push up fuel costs, depending on foreign exchange movements, international petroleum product prices, refining margins and domestic supply conditions.

Distribution costs add to pressure

Clement Isong, executive secretary and chief executive officer of the Major Energies Marketers Association of Nigeria (MEMAN), warned that rising international product prices and distribution expenses could increase pressure on domestic fuel prices. Speaking during a weekend webinar titled Structuring Nigeria’s Domestic Market Distribution Framework, Isong explained that pump prices reflect international product costs, exchange rates, freight, financing, regulatory charges and transportation expenses.

He noted that diesel is a major input in road transport and petroleum distribution, meaning higher diesel prices can also increase the cost of delivering petrol to filling stations. His presentation showed that petrol prices rose by 33% to N1,378 per litre between January and October 2026, while diesel increased by 36% to N1,853 per litre.

What it means for the naira and consumers

The crude rally could increase the cost of running generators, transporting goods and operating machinery, potentially pushing up prices of food and other essential products. Although higher crude prices could boost Nigeria’s oil revenue and foreign exchange earnings, industry experts warn that domestic refiners and consumers may not escape the impact of rising international energy costs.

Isong called for a more efficient distribution system to reduce avoidable costs between refineries and consumers. He recommended prioritising commercially available domestic refinery supplies while using imports to cover shortfalls through competitive procurement. He also advocated transparent pricing, predictable bulk supply arrangements and better coordination among suppliers, depot operators and transporters.

Other measures he proposed include temporary, targeted relief for essential economic activities and greater adoption of compressed natural gas, electric vehicles and solar power to reduce dependence on petrol and diesel. Isong stressed that efforts to lower supply-chain expenses should preserve market-based pricing.

The latest crude rally could further pressure domestic fuel costs if international petroleum product prices and replacement costs rise, although the eventual impact will depend on market conditions and local supply.