Petrol May Hit ₦1,800 Amid Middle East Crisis

A top refinery source, speaking confidentially to NaijaChoice News, attributed the potential spike to sustained attacks by Iran in the region, which have disrupted shipping routes and driven up freight and insurance costs. “The turn of events in the Hormuz Strait is making it increasingly obvious that crude prices will hit $100 a barrel this week,” the source confided. Current benchmarks show Brent crude trading at around $84-$93 per barrel, a sharp rise from pre-conflict levels, with West Texas Intermediate (WTI) following suit at approximately $78-$91.

Dangote Petroleum Refinery, Nigeria’s largest refining facility, has already responded to these pressures by adjusting its gantry price multiple times. As previously reported by NaijaChoice News, the refinery hiked its ex-depot price from N774 to N874 per litre earlier this month, citing escalating global crude costs. By mid-week, the price had climbed further to N995 per litre—a 29% increase within days—prompting retail outlets across Lagos and Abuja to sell PMS at N950-N980 per litre, with some stations reporting N1,000 or higher in remote areas.

Anthony Chiejina, spokesman for Dangote Refinery, expressed deep concern over the situation in a conversation with our correspondent. “The refinery buys crude in dollars, and with freight and insurance reaching record levels, operational costs are higher than ever,” Chiejina said. He emphasized that while the management remains committed to honoring its obligations to Nigerians, the escalating Middle East conflict—marked by drone and missile attacks on shipping lanes—has made the environment increasingly difficult for operators. The Strait of Hormuz, which handles about 20-30% of global crude oil transit, has seen tanker traffic grind to a near halt following Iranian threats to torch vessels and reported attacks on at least three ships.

The ripple effects are already evident nationwide. Before the latest escalation, PMS sold at around N774 per litre, but current prices reflect a 25% increase to N950-N970. Automotive Gas Oil (AGO), or diesel, has surged even more dramatically—from N950 to N1,400 per litre, a 47% jump. Economists warn that if the conflict persists, PMS could reach N1,500 per litre, while AGO might exceed N2,000, exacerbating inflation, transportation costs, and the prices of essential goods.

In response, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has intensified calls for the Nigerian National Petroleum Company Limited (NNPC Ltd.) to urgently facilitate production at the country’s local refineries. PETROAN National President Billy Gillis-Harry, speaking at Ignatius Ajuru University of Education in Port Harcourt during a keynote on “Deconstructing Energy Trilemma,” highlighted the threats posed by the ongoing Israel-US-Iran conflict. “Persistent attacks threaten the Strait of Hormuz, driving global prices to alarming levels,” Gillis-Harry stated. He advocated for the rehabilitation of Nigeria’s four state-owned refineries—Port Harcourt, Warri, and Kaduna—to reduce exposure to international shocks, noting that domestic refining would leverage abundant local crude under NNPC’s custody. PETROAN has pushed for privatization of these facilities by Q1 2026 to attract investment and enhance efficiency, arguing that local refineries are less vulnerable to global disruptions compared to import-reliant operations.

Despite the grim outlook, Gillis-Harry offered a note of optimism, assuring Nigerians that President Bola Ahmed Tinubu’s reform policies will ultimately deliver relief and spur economic growth. Analysts, however, caution that while higher crude prices could boost Nigeria’s oil revenues—surpassing the 2026 budget benchmark of $64.85 per barrel—the downstream sector’s pain will outweigh upstream gains if local refining capacity isn’t ramped up swiftly.

As queues lengthen at filling stations in Lagos and other major cities, Nigerians brace for tougher times ahead.

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