Global oil markets swung sharply upward on Wednesday, recovering five per cent after a brief retreat to $88 per barrel the previous day, as the conflict involving the United States, Iran, and Israel continued to drive volatility across energy markets and its consequences rippled directly into Nigeria’s fuel economy.
Brent crude climbed to $92.43 per barrel as of 10:56 AM West Africa Time, representing a 5.27 per cent increase from Tuesday’s figure. The benchmark had crossed $100 per barrel on Monday as the Middle East war entered its second week with no clear resolution in sight. The main United States contract, West Texas Intermediate, surged 5.9 per cent to $88.38 per barrel on Wednesday, extending the day’s recovery across both major benchmarks.
The bounce came just 24 hours after the Dangote Petroleum Refinery announced a cut in the price of Premium Motor Spirit, responding to Tuesday’s dip in global crude prices, which had fallen to $90 per barrel, described at the time as the first decline since the Middle East war began.
Dangote Group’s Chief Communications Officer, Anthony Chiejina, confirmed to Channels Television on Tuesday that petrol at the gantry would now sell at ₦1,075 per litre, down from ₦1,175 per litre the previous week, representing a ₦100 reduction. Petrol distributed through coastal channels would be priced at ₦1,050 per litre.
The refinery, in an official statement, framed the move as a direct response to the movement in global crude benchmarks. “As responsible corporate citizens operating in a high-governance code and ethical environment, we believe it is imperative to reduce the price of our products as a reflection of the decline in global crude oil prices,” it stated.
The refinery also provided clarity on its crude pricing structure, noting that all crude is priced on the global benchmark plus a premium of between $3 and $6, with foreign exchange costs settled at the prevailing market rate with no subsidy applied on either crude or forex. On the Naira-for-Crude arrangement, the refinery clarified that crude supplied under that arrangement is similarly priced according to the global benchmark, with the premium converted to naira at the prevailing exchange rate.
The reduction marked the first price cut after three consecutive hikes that had pushed petrol costs significantly higher in the weeks preceding it. The context matters: Nigeria, having removed the fuel subsidy under President Bola Tinubu in May 2023, now operates a deregulated downstream sector in which domestic pump prices are expected to track global crude movements. That policy design means that when crude prices spike, as they have done since the Middle East conflict escalated, Nigerians feel the effect almost immediately at filling stations and in transportation costs.
The war involving the United States, Iran, and Israel sent shockwaves through global energy markets from its earliest days. The Middle East accounts for a significant share of global crude oil supply, and any sustained disruption to that supply chain, or even the credible threat of one, is historically sufficient to drive prices sharply upward.
On March 9, the Chief Executive Officer of the Dangote Refinery, David Bird, acknowledged publicly that the facility was not immune to global oil price shocks, noting that the refinery secures its crude on international benchmarks. His statement was notable for what it communicated to the Nigerian public: even a domestic refinery of the scale and ambition of Dangote cannot insulate Nigerian consumers from the external forces that govern crude pricing.
US President Donald Trump, speaking by phone to CBS News on the state of the military campaign, indicated that he believed the conflict was approaching its conclusion. “I think the war is very complete, pretty much. They have no navy, no communications, and they’ve got no air force,” he said. “If you look, they have nothing left. There’s nothing left in a military sense,” he added.
Trump told the broadcaster that the United States was well ahead of his initially stated timeline of four to five weeks. At a separate news conference in Florida, he said “it’s going to be ended soon, and if it starts up again, they’ll be hit even harder.” When asked whether an end could come within days or weeks, he replied, “I think soon. Very soon.”
Whether Trump’s assessment proves accurate or optimistic, the market’s Wednesday rebound suggests that traders were not yet pricing in an imminent end to the conflict’s supply risk premium. Oil markets have a long history of discounting political statements until physical supply disruptions, or their absence, are confirmed.
With fuel prices having risen sharply in preceding weeks and public pressure mounting over transportation costs, President Tinubu on Tuesday directed the immediate deployment of approximately 100,000 Compressed Natural Gas conversion kits across the country. The Executive Chairman of the Presidential Initiative on Compressed Natural Gas, known as Pi-CNG, Ismaeel Ahmed, disclosed the directive after meeting with the president at the State House in Abuja.
Ahmed said the president was closely monitoring global developments and their effect on Nigeria’s energy costs, particularly the impact of the Middle East conflict on fuel prices and transportation. He stated that Tinubu had mandated Pi-CNG to accelerate the rollout of CNG infrastructure and alternative mobility solutions nationwide.
The kits, according to Ahmed, would enable vehicle owners and tricycle operators to convert their engines from petrol to CNG. He added that deployment would begin within two to three weeks.
The CNG push is not new policy. The Tinubu administration has positioned Compressed Natural Gas as a long-term strategy for reducing Nigeria’s dependence on imported refined petroleum products and for managing the cost burden on ordinary Nigerians in a post-subsidy environment. Nigeria holds substantial proven natural gas reserves, estimated by the Nigerian National Petroleum Company Limited at over 200 trillion cubic feet, making it one of the most gas-rich countries in Africa. The argument for CNG as a transport fuel rests on Nigeria’s ability to monetise that resource domestically rather than exporting it in raw form while citizens pay globally benchmarked prices for refined petrol.
Wednesday’s market movements expose the core vulnerability in Nigeria’s current fuel pricing architecture. Deregulation, as implemented, links domestic pump prices directly to international crude benchmarks. That link works in the consumer’s favour when prices fall, as the Dangote cut on Tuesday illustrated. But it works against the consumer when prices rise, and global oil markets, as Wednesday demonstrated, can reverse a single day’s decline with a five per cent swing in the opposite direction.
Nigeria’s inflation rate, which the National Bureau of Statistics placed at 24.23 per cent in March 2025 before subsequent readings factored in petrol price movements, is significantly driven by energy and transportation costs. Every naira added to the pump price has a multiplier effect across the economy, raising the cost of logistics, food distribution, and public transport. Conversely, a ₦100 reduction at the gantry, while welcome, represents a partial rollback of the cumulative hikes that preceded it.
The broader structural challenge remains unchanged. Nigeria imports a large portion of its refined petroleum despite sitting on significant crude oil reserves. The Dangote Refinery, designed with a nameplate capacity of 650,000 barrels per day and described as the largest single-train refinery in the world, was built precisely to address that dependency. Its ability to adjust prices in response to global crude movements, as it did on Tuesday, is a function of that scale. But as long as global crude benchmarks remain the pricing reference point, and as long as the Middle East crisis or any other supply shock persists, Nigerian consumers will remain exposed to the volatility that moves markets in London, New York, and Dubai.
