Nigeria’s downstream petroleum sector is once again under pressure as a recent uptick in global crude oil prices triggers renewed concerns over a steep rise in domestic petrol prices.
Petroleum product marketers and industry stakeholders are now calling on the Federal Government to intervene by subsidising crude oil supplied to local refineries, warning that failure to act could push petrol prices close to ₦1,000 per litre in some parts of the country.
The appeal comes amid growing anxiety among consumers and businesses following successive price adjustments by the Dangote Petroleum Refinery and fluctuating international oil benchmarks, which have combined to squeeze both marketers and end-users.
Petrol price surge and calls for crude subsidy
Industry operators argue that the most effective way to cushion Nigerians against the impact of a petrol price surge is for the Federal Government to sell crude oil to domestic refineries—particularly the Dangote refinery and modular plants—at subsidised rates.
According to marketers, such a policy would help stabilise pump prices and insulate the local market from volatility in the global oil market.
The Independent Petroleum Marketers Association of Nigeria has been at the forefront of these calls, urging President Bola Tinubu’s administration to consider a targeted crude subsidy rather than allowing international price movements to dictate domestic fuel costs unchecked.
IPMAN’s National Public Relations Officer, Chinedu Ukadike, noted that crude oil remains the primary input for fuel production and that its price directly influences the cost of petrol, diesel, and aviation fuel.
He stressed that without a buffer mechanism, sudden increases in crude prices would continue to translate into sharp pump price hikes.
According to him, subsidising crude oil supplied to local refineries would serve as a shock absorber, ensuring that fuel prices remain relatively stable even when global prices rise.
Dangote refinery price hike heightens concerns
The renewed debate was sparked by a recent upward review of petrol prices by the Dangote refinery, which pushed the pump price to about ₦839 per litre at partner filling stations such as MRS.
The adjustment followed an increase in the refinery’s gantry price, which rose from ₦699 to ₦799 per litre after the withdrawal of temporary price support measures introduced during the festive season.
Marketers who had already completed payments at the earlier price were reportedly asked to make additional payments of about ₦100 per litre before loading, a development that reverberated across the downstream market.
Filling stations nationwide responded by adjusting their pump prices upward, with prices in Lagos ranging between ₦830 and ₦859 per litre, depending on location and supply source.
The Nigerian National Petroleum Company Limited also reviewed its pump prices, selling Premium Motor Spirit at about ₦849 per litre along major corridors such as the Lagos-Ibadan Expressway.
Global crude prices add pressure to local market
Compounding the situation is the rebound in international crude oil prices, which recently climbed above $70 per barrel before moderating slightly.
Although Brent crude later settled around $69 per barrel, marketers warned that sustained prices above $60 would continue to exert upward pressure on petrol prices in Nigeria.
Ukadike explained that exchange rate movements and crude oil prices remain the two most critical determinants of fuel pricing in the deregulated downstream sector.
Any adverse movement in either, he said, inevitably affects the final price paid by consumers.
He warned that if the current crude price trend persists, petrol could sell for as much as ₦1,000 per litre in areas far from refineries or major fuel depots, where transportation and logistics costs further inflate prices.
Slower fuel consumption and economic implications
Beyond the immediate price impact, marketers say higher petrol prices are already affecting consumer behaviour.
Fuel sales, which were brisk during the December festive period, have reportedly slowed as households and businesses cut back on consumption.
According to IPMAN, many motorists are now buying smaller volumes of fuel or rationing usage to cope with rising costs.
This trend, if sustained, could have broader implications for economic activity, particularly in sectors that rely heavily on transportation and energy.
Marketers also warned that rising fuel prices tend to feed into inflation by increasing the cost of goods and services, placing additional strain on households already grappling with high living costs.
Government faces policy crossroads
As the petrol price surge debate intensifies, analysts say the Federal Government faces a difficult policy choice.
While the administration has committed to market-driven pricing and fiscal discipline, pressure is mounting to adopt temporary measures that protect consumers from extreme price shocks.
Industry stakeholders argue that a crude subsidy targeted at domestic refineries would be more transparent and efficient than reintroducing blanket petrol subsidies, which have historically strained public finances.
For now, Nigerians remain watchful, hoping that policy interventions or a softening of global crude prices will bring relief at the pumps in the coming weeks.
