An 8.8% surge in global crude oil prices—from $68 to $74 per barrel—has prompted 10 major Nigerian oil marketers to raise their depot petrol prices, sparking fresh concerns over inflation and energy costs in the country. The increase comes amid escalating geopolitical tensions, particularly threats by Iran to block the Strait of Hormuz, a critical maritime route that handles over 20% of global oil and gas shipments.
Marketers Raise Petrol Prices Across Board
The marketers who adjusted their depot prices include Aiteo, Pinnacle, Dangote Petroleum Refinery, MENJ, Swift, Rainoil, First Royal, Emadeb, First Fortune, and Ever Oil.
Among them, EMADEB made the highest upward adjustment, increasing its price from N827 to N845 per litre, a 2.18% rise. On the other hand, Ever Oil made the smallest increase, adjusting its price from N866 to N870 per litre, a marginal 0.46% hike.
Other key adjustments include:
Aiteo: N835 to N840
Pinnacle: N829 to N845
Dangote Petroleum Refinery: N830 to N840
MENJ: N810 to N850
Swift: N830 to N845
Rainoil (Lagos): N840 to N850
First Royal: N826 to N838
First Fortune: N850 to N860
These price increases reflect ongoing instability in global oil markets, with platforms such as Petroleumprice.ng predicting continued upward pressure on depot prices in the weeks ahead.
Global Crisis: The Iran-Israel Tension and Its Impacts
Maritime sources warn that Iran’s threat to block the Strait of Hormuz could severely disrupt global oil trade. The move has escalated market anxiety and introduced new volatility, with OPEC confirming Iran’s vast reserves not only in oil but also in natural gas, coal, and various minerals.
The United States has called for de-escalation, but Iran’s pledge of a “harsh response” to recent developments has left oil markets unsettled.
JP Morgan Forecasts Potential Spike to $130 per Barrel
Financial giant JP Morgan has projected that, under a worst-case scenario involving military conflict and closure of the Strait, oil prices could skyrocket to between $120 and $130 per barrel. The firm’s base-case forecast for 2025 remains above $60, but the potential for severe disruptions has raised alarm across global markets.
Inflationary Pressure Mounts in Nigeria
According to Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), the conflict is likely to cause a significant spike in energy prices in Nigeria. He warns that the inflationary impact could ripple across production, logistics, transportation, and power generation.
He emphasized that:
Energy-driven inflation could lead to higher interest rates.
Global inflation may increase, resulting in imported inflation for Nigeria.
A tighter monetary regime could further squeeze credit access for businesses.
There’s a potential flight to safe-haven assets, affecting investment in non-oil sectors.
Despite these challenges, Yusuf notes that Nigeria could benefit in certain areas if oil prices continue to climb—such as improved foreign exchange earnings, fiscal revenue, and stock market performance, given historical correlations between oil prices and GDP growth.
Economic Experts Weigh In on Nigeria’s Prospects
Professor Wumi Iledare, a petroleum economist and former head of the USAEE, confirmed that prices are currently in bullish territory due to OPEC+ supply cuts and geopolitical tension. He emphasized that while rising oil prices could ease fiscal burdens, Nigeria must apply fiscal discipline and ramp up refining capacity to avoid squandering the opportunity.
Similarly, Olufemi Idowu, a partner at Kreston Pedabo, said that although oil revenue could increase, the benefits would likely be short-lived due to:
Existing crude-for-loan arrangements.
Persistent insecurity in the Niger Delta.
Dangote Refinery’s purchases at international crude prices, which implies rising pump prices in the absence of subsidies.
Downstream Sector to Bear the Brunt
With the deregulation of Nigeria’s petroleum sector, rising international crude prices will directly affect pump prices at home. Idowu warns that even though government revenue may increase, consumers should prepare for increased prices of goods and services, especially energy-related products.
Budget 2025 May Benefit from Higher Oil Prices
According to OGSPAN President, Mazi Colman Obasi, Nigeria’s 2025 budget, which is benchmarked at $75 per barrel with an output projection of over 2 million barrels per day, could receive a substantial boost. If current prices hold or rise further, this could lead to a revenue windfall for the government and bolster fiscal planning.
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Summary:
While the current surge in crude oil prices offers Nigeria an opportunity to strengthen its fiscal position and foreign reserves, the broader economic implications—ranging from higher petrol prices to inflation and interest rate hikes—pose significant challenges. The country’s ability to convert this temporary windfall into lasting economic growth will depend on how effectively it addresses structural deficiencies in the energy sector and manages its oil revenues.
