Oil marketers have advised Nigerians to brace up for a continued rise in the price of Premium Motor Spirit or petrol to about N1,500 per litre as the US-Israeli and Iran war shows no sign of abating.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Dr. Billy Gillis-Harry, gave the advice while appearing on Channels Television’s The Morning Brief on Tuesday to discuss “The Effect of Global War on Fuel Prices.”
According to him, product availability currently being provided by the Dangote Petroleum Refinery, even though at higher prices, is a better option than scarcity.
“The reality is that if you look at the volatility in the price from what we are seeing today, the Dangote Refinery is the salvation for us, due to the consistent source of product, which is much more important at this time than anything. The availability of product is much more important than pricing,” Gillis-Harry said.
“The pricing we predicted has risen above N1,000 per litre, the other time, to N1,175 at the gantry. By the time we add the charges, logistics, and others, the price will get higher and higher. So, yes, N1,500 per litre is not far-fetched. It should not make us panic. It is better for us to have the product available, be able to do our business, and get some level of energy security than not having it,” he added.
His stance followed ongoing tension in the Middle East, which has sent energy prices higher than expected.
Dangote Petroleum on Monday revised its ex-depot prices, increasing the gantry petrol price to N1,175 per litre, while Automotive Gas Oil (AGO), commonly known as diesel, was raised to N1,620 per litre.
The latest revision marks the fourth consecutive price review in less than two weeks amid global market volatility. Under the revised structure, the N1,175 per litre petrol price reflects a significant jump from the previous N995 per litre, while diesel has surged sharply from its prior N1,430 per litre level.
The increases coincide with a sharp rise in international crude oil benchmarks as of 1:00 pm WAT on Monday: Brent crude hit $102.8 (+10.91%) and WTI crude reached $101.0 (+11.08%) due to the Middle East energy crisis.
Oil prices soared 30 percent Monday on fears about supplies from the Middle East, as the war continued into a second week with no sign of letting up. Since the beginning of the war, WTI is up more than 75 percent and Brent more than 60 percent.
Responding to market volatility, the Managing Director and Chief Executive Officer of Dangote Petroleum, David Bird, explained at a press conference on Monday that although Nigeria introduced a crude-for-naira arrangement to enable local refineries to purchase crude oil in the local currency, the pricing of the commodity remained tied to international benchmarks.
As a result, he noted that the refinery still buys Nigerian crude at global market prices and does not benefit from discounted supply.
US President Donald Trump said Monday that he will waive some sanctions on oil to boost supply and bring down prices, due to market turmoil over the war.
“We’re also waiving certain oil-related sanctions to reduce prices. We have sanctions on some countries. We’re going to take those sanctions off till this straightens out,” Trump told reporters after talks with Russian President Vladimir Putin.
The oil market responded positively on Tuesday after President Trump’s war de-escalation statement. “I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no air force. If you look, they have nothing left. There’s nothing left in a military sense,” Trump told CBS News by phone.
He later told a news conference in Florida that “it’s going to be ended soon, and if it starts up again they’ll be hit even harder.” When asked if he thought the war could end in days or weeks, he replied: “I think soon. Very soon.”
