Higher petrol prices loom for Nigerians as Brent crosses $95

Nigerian motorists are bracing for another round of pump-price increases after Brent crude pushed above $95 a barrel this week, its highest level since late July, as fighting around the Strait of Hormuz threatens to choke off a key artery of global oil supply.

The benchmark jumped roughly 5 percent in a single session after U.S. forces struck Iranian targets near the strait, retaliation Washington said followed Iranian attempts to mine the waterway and a strike on an American base.

Iran said it had already hit back at U.S. positions in the region, while tankers near Oman reported being struck by unidentified projectiles. Traders are now pricing in the risk that a prolonged standoff could disrupt some of the roughly 17 million barrels a day that typically flow through the corridor.

Read also: Dangote Refinery threatens petrol exports as imports hit 43%

The rally is already showing up at Nigerian fuel depots. Dangote Petroleum Refinery, the 650,000-barrel-a-day plant that has reshaped the country’s downstream market since coming online, lifted its gantry price for premium motor spirit to N1,265 a litre on August 29, an increase of N65 from the prior level.

Independent marketers have pushed even higher: some depots in Lagos, Calabar, Port Harcourt and Warri were quoting as much as N1,290 to N1,400 a litre this week, according to industry trackers, with retail pump prices in cities like Kaduna already topping N1,330.

Dangote has pointed to a familiar culprit, heavy reliance on imported fuel, which the refinery says still accounted for more than 40 percent of Nigeria’s petrol supply in July even though its own capacity exceeds domestic demand.

Dipo Oladehinde is a skilled energy analyst with experience across Nigeria's energy sector alongside relevant know-how about Nigeria’s macro economy. He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions.