Nigeria is facing a fresh fuel price warning as disruptions to global oil supplies threaten to push Brent crude towards $120 a barrel, raising concerns over petrol, diesel, transport and production costs. The situation comes at a time when households and businesses are already dealing with high living expenses. While higher crude prices could increase Nigeria’s oil earnings and government revenue, analysts warn that the benefit may be limited because the country is producing below its budgeted target.
The latest supply shock followed disruptions to Middle Eastern oil flows, including Saudi Aramco’s cancellation of September and October crude allocations to European buyers. Analysts at Goldman Sachs and Capital Economics have warned that prolonged disruptions could send oil prices above $120 a barrel, with Brent potentially reaching $130. For Nigeria, the development is complicated by the country’s lower crude output. The 2026 budget was based on an oil price of $64.85 per barrel and production of 1.84 million barrels per day, while August production was reported at about 1.5 million barrels per day, excluding condensates.
The pressure could quickly spread beyond the fuel pump. Higher international crude and refined-product prices could increase the cost of petrol and place an even heavier burden on diesel-dependent manufacturers, transporters, farmers, logistics operators and businesses that rely on generators. The National Bureau of Statistics’ August figures showed headline inflation at 15.39 per cent, while food inflation remained above 19 per cent. Rising diesel and transport costs could therefore add pressure to the movement of food and other goods across the country. At the same time, Dangote Petroleum Refinery could benefit from stronger European demand for diesel and other refined products, although increased exports could create concerns about domestic availability and pricing.
The Centre for the Promotion of Private Enterprise (CPPE) Chief Executive Officer, Muda Yusuf, urged the Federal Government to temporarily suspend taxes, fees and levies imposed on refineries to help reduce the impact of rising energy costs. He also called for greater investment in mass transportation, subsidised public buses and wider adoption of remote work to reduce commuting costs. Petroleum economist Prof. Wumi Iledare similarly urged the government to expand CNG- and LPG-powered public transportation and prioritise road maintenance, arguing that alternative fuels and better roads could reduce fuel consumption and operating costs.
Dangote Group President and Chief Executive Aliko Dangote, meanwhile, attributed the refinery’s latest petrol price increase from N1,265 to N1,350 per litre at the gantry to rising international market costs, crude acquisition expenses and freight charges. He said the earlier price had become difficult for importers to sustain and explained that the refinery had purchased some crude at $124 per barrel, while transportation costs had also risen amid the Middle East crisis. As global oil markets remain unsettled, Nigerian households and businesses now face the possibility that higher crude prices could translate into another round of higher energy, transport and production costs, even as the country seeks to benefit from increased oil revenues.
source: The guardian
