Nigerian motorists faced a fresh wave of financial pressure yesterday as oil marketers raised the pump price of Premium Motor Spirit, PMS, commonly known as petrol, to N1,300 per litre from N1,050 per litre, representing a sharp 24 per cent increase within hours. The development follows the sustained surge in international crude oil prices to 110 per barrel, driven by escalating geopolitical tensions in the Middle East that have rattled global energy markets and exposed the fragility of Nigeria’s post-subsidy fuel pricing framework.
The price adjustment was not limited to petrol. Automotive Gas Oil, AGO, or diesel, saw equally steep increases at retail outlets operated by MRS, where the product now sells at N1,380 per litre, up from N1,100 per litre. The Nigerian National Petroleum Company Limited, NNPCL, outlets in Lagos and surrounding areas have pegged diesel at an even higher N1,680 per litre, creating a widening price disparity that reflects the uneven distribution economics currently shaping the downstream petroleum sector.
In Ibadan and neighbouring communities across Oyo State, the price shock was immediate and severe. Petrol, which had traded between N1,020 and N1,080 per litre prior to the latest adjustment, now commands between N1,200 and N1,300 per litre at the pump. An official of the Independent Petroleum Marketers Association of Nigeria, IPMAN, who requested anonymity due to the sensitive nature of pricing discussions, attributed the increase directly to the rising landing cost of petroleum products. According to this source, the cost of lifting fuel from Lagos depots has climbed to N1,175 per litre, a figure that leaves minimal margin for retailers once transportation and operational costs are factored in. “The pump price varies, depending on the destination. While the pump price in Ibadan hovers around N1,200 and N1,300 per litre, the same cannot be said of places like Ogbomoso and Oke-Ogun areas,” the marketer explained, highlighting the regional disparities that characterise Nigeria’s deregulated fuel market.
The price trajectory in Abuja has been even more dramatic. Just seven days ago, petrol sold at N880 per litre at several retail outlets in the Federal Capital Territory. That figure has now more than doubled to over N1,300 per litre, following a decision by Dangote Petroleum Refinery to increase its gantry price, the ex-depot rate at which it sells to marketers, from N995 per litre to N1,175 per litre for petrol, and from N1,430 per litre to N1,620 per litre for diesel. In a formal notice to oil marketers, the refinery traced the adjustment to what it described as prolonged instability in global oil markets, which has pushed crude prices from 102 per barrel to 110 per barrel within days.
The cascading effect of the refinery’s price adjustment has been visible across Abuja’s retail network. Filling stations have implemented four distinct price increases over the past week alone. On Monday, petrol sold at N880 per litre. By the weekend, it had risen to N960 and then N1,080. Early yesterday, the price jumped to N1,103 before the latest surge pushed most outlets above N1,300. This rapid escalation has had an immediate and painful impact on transportation costs. Investigations at bus stops in Area 8, Garki, and the Central Business District revealed fare increases exceeding 100 per cent on several routes. Journeys that cost N800 a week ago now command N1,500, while the trip from Area 8 to Nyanya has doubled from N500 to N1,000.
An energy expert, speaking to Vanguard newspaper, described the price surge as inevitable given the mechanics of global refining economics. “The margins for refineries are very small, we’re talking about 1.3 or 1.5 per cent and so any small increment in crude price has major effect on product price. That is how it works and so any shift in crude prices will shift product prices,” he stated. He dismissed the notion that existing stockpiles could buffer the impact, arguing that “it doesn’t matter that there is stock unless Nigeria will subsidise crude for Dangote again. By this, I mean unless Nigeria will not sell to him again at the international price. Old stock doesn’t matter because the old stock will buy the new stock.”
Olufemi Idowu, Partner at Kreston Pedabo, offered a broader structural critique. He noted that despite Dangote Refinery’s installed capacity of 650,000 barrels per day, the facility receives less than half that volume from government and local oil companies. “Out of about 12 cargoes it needs, it is receiving about five cargoes. It means the refinery has to source for the remaining seven from somewhere else,” Idowu explained. He warned that the conventional economic assumption that rising oil prices benefit producing nations does not hold in Nigeria’s case due to the country’s continued reliance on imported refined products. “The rise in oil prices should ordinarily boost our economy, but in reality, citizens will likely not feel the benefit because of our reliance on imported refined products. Households and businesses are rather burdened by increasing fuel costs, which is a sad reality,” he said.
Chinedu Ukadike, Public Relations Officer for IPMAN, confirmed the N1,175 per litre gantry price from Dangote Refinery but disclosed that the facility was not selling directly to independent marketers as of yesterday, possibly due to internal reconciliation processes related to the new pricing structure. Ukadike revealed that marketers were instead sourcing products from Pinnacle Oil and Gas, a tank farm operator, at N1,200 per litre. “The price at the pump is determined by logistics, transportation and mark-up. These are determining factors marketers consider to retail fuel price. Given that our members purchase the product at the rate of N1,200 per litre from Pinnacle Oil, the price will vary at the pump, depending on the location, from N1,250 to N1,300 per litre in Lagos, while outside Lagos would cost N1,350 or more per litre,” he elaborated.
The Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, has issued a stark warning that prices could climb significantly higher if Middle East tensions persist. Billy Gillis-Harry, National President of PETROAN, projected that petrol could approach N2,000 per litre while diesel might reach N3,000 per litre under a prolonged conflict scenario. “PMS could rise close to N2,000 per litre, while AGO may approach N3,000 per litre if the situation persists,” Gillis-Harry stated. He predicted sharp increases in petroleum product prices across both international and domestic markets in the coming days, given the absence of any clear resolution to the regional conflict.
Gillis-Harry has called on Bayo Ojulari, Group Chief Executive Officer of NNPC Limited, to expedite the commencement of production at Nigeria’s publicly owned refineries, specifically the Area 5 plant at the Port Harcourt refinery complex and the Warri refinery. He argued that government-owned refineries are less susceptible to global supply disruptions than privately operated facilities that depend on imported crude feedstock. He warned that continued price escalation would have severe macroeconomic consequences, stating that it “will worsen inflation, cause job losses, deepen economic hardship, increase transportation costs and raise prices of goods and services nationwide.” He emphasised the foundational role of petrol and diesel in the economy, noting that “PMS remains essential for daily mobility, while AGO is vital for manufacturing and industrial operations.”
The transportation sector has already begun absorbing the shock. In Lagos and other major cities, commuters faced stranded vehicles and sudden fare adjustments. In Ibadan, intra-city and inter-city transport operators have implemented immediate increases. Trips from Sango to the University of Ibadan now cost between N250 and N300, up from N200, while the fare from Dugbe to Ojoo has jumped to N900 from N600.
Wumi Iledare, Professor of Petroleum Economics, offered a nuanced assessment of Dangote Refinery’s role in the current crisis. He estimated that the Iran-related tensions have driven global crude prices up by 7 to 10 per cent within a week, a shock that would typically translate to 5 to 8 per cent increases in petrol prices in import-dependent West African markets. However, he argued that domestic refining capacity provides a partial buffer. “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 explained. He characterised the current moment as an opportunity to expand crude sales to local refineries in naira, particularly given that Nigeria is not meeting its OPEC production quota in international markets. “Domestic refining demand is growing, and aligning crude supply with local refining capacity could help stabilise both energy supply and the naira,” he observed.
Dr Muda Yusuf, Executive Director of the Centre for Promotion of Private Enterprises, CPPE, has called for policy measures to encourage additional indigenous refining investments. He outlined a coordinated approach involving trade policy, fiscal policy, and monetary policy measures to sustain refining investments. His recommendations include ensuring reliable crude supply arrangements, strengthening petroleum distribution infrastructure, introducing tariff protection for domestic refiners, encouraging additional refining investments, and promoting export competitiveness for refined products. “While domestic refining may not completely eliminate the effects of global oil price volatility, it significantly reduces the risks of supply disruptions, conserves foreign exchange, strengthens the balance of trade, and enhances national energy security,” Yusuf stated.
Matthew Anthony, Senior Market Analyst for Africa, noted that major oil producing nations including Nigeria could benefit from the price surge if they manage inflationary pressures effectively. However, he highlighted the broader market turmoil, describing how “a wave of risk aversion engulfed global markets on Monday as ongoing conflict in the Middle East accelerated the flight to safety.” He reported that Asian shares plunged, European markets opened deep in negative territory, and US equity futures signalled a negative open as investors scrambled to price in the chaos from the Iran conflict. In commodity markets, oil prices have jumped over 25 per cent as major Middle East producers curbed output. Brent crude has gained roughly 30 per cent this month, pushing 2026 gains to over 70 per cent, while West Texas Intermediate, WTI, crude is up almost 80 per cent year-to-date. Anthony noted that the last time oil benchmarks crossed into triple digits was in 2022 during the Russian-Ukraine war, a period when geopolitical risk and COVID-19 supply disruptions caused inflation to skyrocket globally.
The price surge has created a paradox for the Federal Government. The 2026 budget was predicated on a crude oil benchmark of 64.85 per barrel, daily production of 1.84 million barrels, and an exchange rate of N1,400 to the US dollar. With crude now trading at 110 per barrel, the government has overshot its revenue target by approximately 70 per cent. Yet this fiscal windfall offers little comfort to citizens who have been grappling with economic hardship since the withdrawal of fuel subsidies removed the price protection that had long shielded Nigerian consumers from global market volatility.
Amid the uncertainty, David Bird, Managing Director of Dangote Petroleum Refinery, has sought to reassure the public regarding supply security. Speaking during a media engagement, Bird stated that while fuel import-dependent countries are already experiencing panic-buying and rationing, Nigeria will not face such challenges due to the existence of domestic refining capacity. “Just a week ago, oil was trading in the mid 60 range, and it has now climbed to nearly 120 per barrel,” he observed, adding that the shock has affected every segment of the global energy supply chain. Bird acknowledged that Dangote Refinery, like all global refiners, is exposed to fluctuations in crude prices, freight charges, and insurance premiums. However, he stressed that Nigeria enjoys a critical advantage in supply security. “What would be worse than 120 oil is no oil,” he stated, noting that some countries have begun implementing rationing due to complete import dependence. He revealed that several nations with significant refining capacity have started restricting fuel exports to safeguard local supply amid the ongoing global supply shock. Bird confirmed that the refinery can produce between 50 million and 55 million litres of petrol daily, with the ability to increase output through blending if needed. With Nigeria’s daily petrol consumption estimated at 35 million litres, he asserted that the facility has more than enough capacity to meet national demand. “We will ensure that Nigeria enjoys fuel abundance, not fuel scarcity,” Bird declared, while noting that pricing decisions ultimately rest with government policymakers given that “pricing is determined largely by global commodity markets.”
The fuel price crisis unfolded against a backdrop of heightened security concerns. The United States State Department issued a warning yesterday regarding potential terrorist threats against US facilities and American-affiliated schools in Nigeria. The embassy in Abuja advised US citizens to “increase awareness of your surroundings, avoiding predictable routines, and reviewing general security precautions with your family.” The notice did not specify the source of the threat. The warning followed President Donald Trump’s Christmas Day order for US military bombings in Nigeria, which he stated targeted jihadist elements. The attack came after Trump complained that Christians were being persecuted in the region.
