As the United States and Iran are unable to reach an agreement on a ceasefire that would allow the Strait of Hormuz to reopen, the price of Premium Motor Spirit (petrol) is approaching N1,400 per litre in many regions of the country.
Petrol prices have been rising due to the ongoing Middle East crisis and the United Arab Emirates’ withdrawal from the Organisation of the Petroleum Exporting Countries on Tuesday.
Brent crude increased from $105 per barrel on Monday to $118 on Wednesday. The Dangote Petroleum Refinery consequently increased the price of its gasoline gantry from N1,200 to N1,275 per barrel.
Petroleumprice provided the price information.The refinery increased its petrol loading price from N1,200 per litre to N1,275 per litre, while coastal supply prices increased to N1,215 per litre, according to a Dangote refinery official’s confirmation on Wednesday.
According to a second source with knowledge of the matter, the refinery stopped entering pro forma invoices at around 4 p.m. on Tuesday, thereby interfering with regular supply scheduling throughout its loading system. According to the sources, sales of gasoline and diesel to marketers immediately stopped as a result of the suspension.
According to a report by Oilprice.com, the Nigerian National Petroleum Company Limited increased the official selling prices of all 37 Nigerian crude grades for May-loading cargoes.
The NNPC raised the price of its flagship grade, Bonny Light, by $6.13 per barrel for May compared to April, indicating that Nigeria was benefiting from the US-Iran war, according to the report. In a similar vein, Forcados saw a $7.01 increase per barrel.
Nigeria benefits from the conflict with Iran. According to the report, Nigeria’s national oil company, NNPC, has increased the official selling prices of all 37 Nigerian crude grades for May-loading cargoes. Its flagship grade, Bonny Light, has increased by a staggering $6.13 per barrel since April, while Forcados has increased by $7.01 per barrel.
The Dangote Petroleum Refinery may be able to pay more for crude, which would raise fuel prices, according to a prediction made by The PUNCH on Wednesday.
On Wednesday, filling stations in Lagos and other South-West states quickly increased their pump prices from an average of N1,250 to more than N1,300 per litre. The PUNCH’s investigation revealed that as of Wednesday, gas prices at filling stations in Lagos and Ogun states ranged from N1,315 to N1,350.
Mobil charged N1,320 per litre, while the NNPC filling stations along the Lagos-Ibadan Expressway’s Mowe/Ibafo axis charged N1,315.
The location affects the prices. Petrol prices were increased to about N1,400 per litre in the north and other areas distant from the Dangote refinery. Because the Federal Government has prohibited the supply of petroleum products in Ogun border communities, residents claim that a litre of gasoline is nearly N1,700.
Speaking, Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, stated that prices might keep rising unless US President Donald Trump permits peace to prevail in the Middle East.
According to Gillis-Harry, fuel vendors have experienced unexpected price volatility, which makes making business decisions challenging. He lamented that even though the federal government is benefiting more from the high price of oil, it is not doing anything to help the masses.
Price volatility is what we have been introduced to. It’s concerning that the government isn’t saying anything about it. The government could at least devise some policies. The price of crude oil is currently rising. Along with a few other things, the government can help lower transportation costs, which will make food less expensive. We have recommended that,” he stated.
According to the head of PETROAN, if the Middle East crisis is not resolved, the price of gasoline may surpass N1,500 per litre.
“If you go back to our predictions, I said that because, in my opinion, Mr. Trump is not very clear about what he wants—whether it is to destroy the Iranian nuclear facility or to seize the crude oil as they are taking over Venezuela’s. We don’t really know what he wants, in my opinion. Therefore, we cannot be certain that the crisis is coming to an end.
As you can see, the UAE has opted out of OPEC at a very rapid pace. For this reason, we have also advised Nigeria to think creatively and consider ways to increase production. We have the reserves, so it doesn’t require any advanced knowledge. In addition to ensuring that host communities are peaceful and that violence is no longer the main focus, it serves to motivate investors. Billions of dollars have been invested in assets found in Bauchi and other places, but nothing has come of them.
In order to at least clearly put 2 million barrels into domestic refining, we should pay attention to all those areas and boost our production value and speed. That will be far better since we will then develop into a refining centre to ensure employment, boost companies, and stimulate our economy. Individuals will pay better taxes and work for fair wages without complaining. That’s where we are,” he suggested.
Gillis-Harry stated that retailers will continue to make adjustments because the Dangote refinery demonstrated its power by altering prices at will. Because he is the manor’s lord, Dangote has raised the price once more. Thus, we’ll continue to make adjustments,” he continued.
The head of PETROAN insisted that the increase in NNPC oil prices was a factor in the rise in gas prices, but he added that the closure of the Strait of Hormuz was the cause of all price increases.
“We are not trading locally, which is the reason for every single increase from any quarter. Nigerian goods are still benchmarked internationally. Crude is still valued in dollars, regardless of whether we are paying naira for local refining. The only change it has made is that you won’t have to rush for cash to purchase the crude you plan to refine here.
We recommend that this privilege be extended to all refineries, whether or not they are modular, at least to those that are currently producing or will soon produce PMS,” he stated.
The Dangote refinery had been subsidising the gasoline and diesel it was selling to the Nigerian market, a senior management official of the Dangote Group disclosed on Monday.
Given the increase in crude prices after the US-Iran war, the company’s N1,200/litre ex-depot price for petrol was below the competitive market price, according to the official, who spoke to our correspondent in confidence because they lacked the authority to speak.
According to The PUNCH, when Iran blocked the Strait of Hormuz, the Middle East conflict caused an increase in oil prices. Brent, the world benchmark for crude, surged above $100 per barrel from $66 on February 28.
Dangote consequently increased the price of its gasoline gantry from N774 to N1,275 at the time this report was filed. Diesel and aviation fuel were also impacted by the increase in oil prices.
Local refiners urged the Federal Government to abandon the use of international pricing benchmarks for crude supplied to domestic plants in response to the rising oil prices brought on by the US-Iran war. They claimed that the current system inflates costs and jeopardises local refining.
The group of roughly six Iranian ships indicates that Iran is still loading oil onto Iranian tankers that are attempting to depart the Middle East. However, the accumulation of ships inside the US blockade line but outside the Strait of Hormuz indicates that US vessel interception is at least delaying Iranian oil exports.
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