Nigerians may soon face another increase in fuel prices as global crude oil prices begin to rise again due to growing tension between the United States and Iran.
On Wednesday, crude oil prices surged sharply, hitting about $126.41 per barrel, up from $115 the previous day. This is the highest level recorded since March 2022. However, the price later dropped slightly to around $114 per barrel. The sudden increase was driven by fears that the conflict between the U.S. and Iran could worsen and disrupt global oil supply.
Tension in the region grew stronger after Israel’s Defence Minister, Israel Katz, hinted that Israel might take further action against Iran to stop any long-term threat.
Reports from Reuters show that Brent crude rose to its peak of $126.41 before falling again by about 3.5 percent to $113.89. The June contract is about to expire, while the July contract dropped slightly to $108.70. Meanwhile, U.S. crude oil also declined to $104.60 after earlier reaching $110.93.
Despite the slight drop, both major oil benchmarks are still on track to record their fourth straight monthly increase. This shows that the market is still worried that the Iran crisis could affect oil supply for a long time.
Speaking on the situation, the Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, explained that Nigeria will feel the impact immediately. According to him, when crude oil prices go up, it becomes more expensive for Nigeria to import refined petroleum products like petrol, diesel, and aviation fuel.
He added that this will push up landing costs and force marketers to increase their prices. As a result, depot prices are expected to rise very soon, and marketers are already adjusting their expectations for petrol, diesel, and aviation fuel.
This situation may lead to higher pump prices, increased transport fares, higher air ticket costs, and overall inflation in the country. If global oil prices continue to rise, both individuals and businesses in Nigeria will feel the pressure.
Checks also show that the price of petrol, also known as Premium Motor Spirit (PMS), has already increased from about ₦1,250 to ₦1,300 per litre in many filling stations across Lagos and nearby areas.
Reacting to this, the President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), Colman Obasi, said the instability in the global oil market will continue to affect Nigeria for as long as the U.S.-Iran conflict remains unresolved. According to him, the longer the crisis lasts, the more unstable fuel prices will become.