Crude Hits $107, Fresh Petrol Price Hike Looms

A fresh increase in petrol prices is looming in Nigeria as international crude oil prices surge above $107 per barrel, raising concerns over higher costs across the downstream petroleum market.

Brent crude, the global benchmark, settled at $107.63 per barrel on Thursday, its highest level since May, after rising more than six per cent in a single session. The rally continued on Friday, with Brent trading above $108 amid escalating tensions in the Middle East.

The sharp increase in crude prices is putting pressure on the cost of petroleum products in Nigeria, where fuel prices are largely determined by market forces.

Oil marketers have indicated that the sustained rise in international crude prices could translate into higher petrol prices if the trend persists.

The development comes after petrol depot prices and refinery gantry prices recorded significant increases in recent weeks. Dangote Petroleum Refinery had raised its petrol price to about N1,265 per litre, while depot prices in some locations climbed to around N1,290 per litre.

Industry data have also shown that the landing cost of imported petrol has risen above N1,300 per litre, increasing pressure on marketers and consumers.

The latest crude rally is being driven largely by escalating geopolitical tensions and disruptions around major oil supply routes, including the Strait of Hormuz and the Red Sea. Brent has gained sharply as markets price in the risk of prolonged supply disruptions.

For Nigeria, the impact could extend beyond petrol prices. Higher fuel costs are likely to increase transportation, logistics and operating expenses for businesses, potentially adding to inflationary pressures.

The Nigerian downstream petroleum market has remained sensitive to movements in international crude prices, foreign exchange costs, refining expenses and logistics.

With crude now trading significantly above $100 per barrel, consumers and businesses face renewed uncertainty over the direction of petrol prices.

Any sustained increase in pump prices would further raise the cost of transportation and goods, placing additional pressure on households already dealing with elevated living expenses.

The latest development therefore raises the prospect of another round of petrol price adjustments if international crude prices remain at elevated levels.