Fuel price spike triggers fresh naira-for-crude supply calls

Petrol prices rose to N937 per litre on Tuesday amid escalating tensions in the Middle East, prompting oil marketers and refinery operators to urge the Federal Government to provide more crude oil to the Dangote Petroleum Refinery in naira to help stabilise domestic fuel prices.

The PUNCH reported on Monday that the Dangote refinery increased its gantry price from N774 to N874. The adjustment followed a jump in oil prices to $84 per barrel, up from below $70 days before the airstrikes involving the United States, Iran, Israel, and other countries.

“The new gantry price is now N874 per litre from N774. The review became necessary due to changes in global crude fundamentals and replacement costs,” an official of the Dangote refinery said.

Following the increment, filling stations on Tuesday raised their pump prices to N937 or N935, depending on the location. A survey by our correspondents confirmed that an MRS filling station in Obalende, Lagos, sold petrol at N937 on Tuesday.

The MRS and Petrocam stations in Mowe, Ogun State, dispensed petrol at N935, while Heyden offered N930. Similarly, SAO, SGR, and AP sold the product at N925. Matrix also dispensed the fuel at N937.

Before the Middle East crisis, some filling stations had already been selling premium motor spirit at prices ranging between N812 and N839, depending on the location. However, the crisis over the weekend disrupted the global fuel market, affecting Nigeria and other countries.

Reacting in a statement on Tuesday, the Petroleum Products Retail Outlet Owners Association of Nigeria emphasised the urgent need to consolidate and strengthen Nigeria’s domestic refineries, particularly the Dangote refinery, through the provision of adequate and consistent crude oil supply in naira.

According to PETROAN’s spokesperson, Joseph Obele, this “proactive approach” is essential to minimising the impact of external geopolitical shocks on the nation’s petroleum market.

The National President of PETROAN, Billy Gillis-Harry, expressed deep concern over the ongoing military escalation involving the United States, Iran, Israel, and allied nations, and its far-reaching implications for the global energy industry, particularly Nigeria’s petroleum sector.

According to him, recent geopolitical tensions have significantly disrupted global energy markets and supply chains.

PETROAN noted that hostilities in the Middle East, especially around the strategic Strait of Hormuz, through which approximately 20 per cent of the world’s crude oil supply passes daily, have triggered sharp volatility in international oil prices and heightened uncertainty regarding supply continuity.

It added that as the conflict intensified, global crude oil benchmarks had surged, with analysts projecting that prices could exceed $100 per barrel if disruptions persist, noting that the upward trend reflected growing concerns over potential supply shortages should shipping activities through the Strait of Hormuz remain restricted.

PETROAN stated that any sustained increase in crude oil prices would inevitably be reflected at petroleum retail outlets across Nigeria. “If the crisis continues, the impact will extend beyond pump prices to affect foreign exchange stability, domestic fuel pricing structures, and overall inflation levels within the country,” Gillis-Harry warned.

The association urged the Federal Government to encourage and prioritise local refineries by ensuring a steady crude oil supply in naira, particularly to the Dangote refinery, and by creating enabling policies that support optimal operations.

PETROAN also called on the government to sustain and strengthen the Naira-for-Crude policy to reduce pressure on foreign exchange and stabilise domestic fuel pricing.

“In view of these developments, PETROAN calls for urgent and strategic actions to safeguard Nigeria’s energy security: encourage and prioritise local refineries by ensuring a steady crude oil supply in naira, particularly to the Dangote refinery, and create enabling policies that support optimal operations. Sustain and strengthen the Naira-for-Crude policy to reduce pressure on foreign exchange and stabilise domestic fuel pricing.

“Urgently revamp the four government-owned refineries to restore them to full operational capacity and reduce dependence on imported petroleum products. Monitor global market developments and respond proactively to emerging risks. Advocate policies that strengthen domestic refining capacity and reduce reliance on imports. Support measures aimed at shielding consumers from excessive fuel price shocks,” the statement stated.