As petrol prices jumped to about N1,300 per litre in various parts of Nigeria on Monday, businesses across the country are beginning to prepare for a sharp rise in their operational costs, with economists and the Organised Private Sector warning that the hike could fuel inflationary pressures affecting goods and services.
A litre of Premium Motor Spirit (petrol) rose to about N1,300 per litre in most filling stations nationwide on Monday after the Dangote Petroleum Refinery hiked its gantry price from N995 to N1,175 a litre, marking the third upward adjustment within a week. Some filling stations sold a litre for N1,250, N1,350 and N1,400 respectively.
The surge followed the ongoing US-Iran war, which has driven global crude prices to about $115 per barrel before crashing to $98 later in the evening. The price of Automotive Gas Oil (diesel) also increased to between N1,380 and N1,680 per litre at various outlets.
The hike in fuel price has affected transportation costs, leaving commuters stranded at various locations. In Ibadan, commercial drivers now charge between N250 and N300 for trips from Sango to UI, compared to the previous fare of N200. The fare from Dugbe to Ojoo has increased to N900, up from N600.
In Abuja, fares on routes which cost about N800 before the prices began rising a week ago have risen to N1,500. Fare from Area 8 to Nyanya which cost N500 doubled to N1,000.
The Organised Private Sector warned that the surge in petrol prices could trigger higher transport and food prices. They urged the Federal Government to strengthen efforts to boost local refining capacity and find ways to tackle the incessant surge in fuel prices.
The Executive Director of the Centre for Promotion of Private Enterprises (CPPE), Dr Muda Yusuf, called for more favourable policies to encourage more indigenous refiners to stabilise prices.
“There is need for policy priorities for sustaining refining investments. Given the strategic importance of domestic refining to Nigeria’s energy security, external sector stability and industrial development, it is essential that the policy environment remains supportive of investment in the sector,” Yusuf said.
A Professor of Petroleum Economics, Wumi Iledare, said the impact on Nigeria could have been more severe without the Dangote refinery.
“The recent Iran tension pushed global crude prices up roughly 7–10% within a week, and in import-dependent markets like West Africa, such shocks typically translate into 5–8% increases in petrol prices because refined products quickly track crude movements. This is where local refining begins to show its value. With the Dangote Refinery processing domestic crude, part of the global escalation can be absorbed through logistics savings, freight elimination, and supply smoothing, potentially dampening about 20% of the price shock,” Iledare said.
“In simple terms, without domestic refining, Nigerians would feel the full impact of global volatility; with it, some of that pressure can be cushioned.”
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) warned that petrol price in Nigeria might rise to as high as N2,000 per litre if the Middle East war persisted.
According to the National President of PETROAN, Billy Gillis-Harry, the price of diesel could rise to about N3,000 per litre if the current situation continues.
“PMS could rise close to N2,000 per litre, while AGO may approach N3,000 per litre if the situation persists,” Gillis-Harry said, calling on the NNPC to facilitate immediate commencement of production at Nigeria’s local refineries.
The Managing Director of Dangote Petroleum Refinery, David Bird, reassured Nigerians that the refinery will continue to meet the country’s fuel needs, despite ongoing disruptions in the global oil and gas market.
“Just a week ago, oil was trading in the mid $60 range, and it has now climbed to nearly $120 per barrel,” he said, adding that the shock has affected every segment of the world’s energy supply chain.
“What would be worse than $120 oil is no oil,” he stated, pointing out that some countries are already implementing rationing because they relied completely on imports.
Bird emphasised that as long as the refinery continued to receive Nigerian crude through the Federal Government and the NNPC, it will sustain its supply to the domestic market.
“The facility can produce between 50 million and 55 million litres of petrol daily, with the ability to increase output through blending if needed. We will ensure that Nigeria enjoys fuel abundance, not fuel scarcity,” he affirmed.
