Nigeria may soon face an increase in fuel prices following a recent surge in global crude oil prices, particularly Brent crude, which has risen to $81.09 per barrel from $76 just last week.
The increase, driven by geopolitical tensions and sanctions on Russian oil exports, has raised concerns about the future cost of petrol and other petroleum products in the country.
As of the latest report, the price of Brent crude is hovering above the $80 mark, prompting experts to predict a possible rise in the cost of refined products.
The Nigerian government had earlier benchmarked its 2025 budget on an oil price of $75 per barrel, making this rise particularly significant.
The increase in crude oil prices could directly affect the ex-depot prices of refined fuel across Nigeria’s depots, leading to a ripple effect on retail prices for consumers.
In Lagos, the price of diesel (automotive gas oil) has already seen an increase of at least N70, rising from N1,050 to N1,120 per litre.
This adjustment comes after a steady period of lower prices, which had been welcomed by consumers.
In addition to diesel, the landing cost of petrol, which stood at N887.51 per litre in mid-December, is expected to rise in the coming weeks due to the increase in global crude prices.
The rise in crude oil prices also threatens to undo the recent reductions in petrol prices, which had been announced last year by Dangote Refinery and the Nigerian National Petroleum Company Limited.
These price cuts had seen petrol retail prices fall to between N935 and N965 per litre from a high of N1,040. However, with the new surge in oil prices, consumers could once again face prices in the range of N1,100 per litre nationwide.
This development could have a significant impact on the Nigerian economy, already grappling with high inflation.
Food inflation, in particular, stood at 39.93 percent in November 2024, while headline inflation reached 34.60 percent.