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Oil and Gas Experts Explain Why Fuel Price Has Increased in Nigeria After the Holiday Period

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Oil and Gas Experts state that the sharp rise in the price of petrol in Nigeria after the holiday period was primarily because of the increase in the cost of crude oil and adjustments made by the Dangote Petroleum Refinery. According to the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), crude oil prices, which serve as the major determinant of fuel production costs, have been on an upward trajectory, leading to inevitable consequences for domestic fuel prices. Festus Osifo, the National President of PENGASSAN, emphasized that the lack of improvements in foreign exchange rates compounds this issue, as the cost of importing and refining fuel also rises in line with global crude prices.

The recent surge in pump prices has caught the attention of the general public and industry stakeholders alike. Petrol now retails between N1,050 and N1,150 per litre, depending on the region, a significant jump from the prices seen just a few weeks ago. This adjustment follows the upward price review by the Dangote Petrochemical Refinery, Nigeria’s leading supplier of refined petroleum products. Effective from 5:30 pm on Friday, the refinery increased its Premium Motor Spirit (PMS) price at its loading gantry from N899 per litre to N955 per litre for customers purchasing between two million and 4.99 million litres. For bulk purchases of five million litres or more, the price now stands at N950 per litre.

This price revision represents a 6.17 percent increase from the discounted rates offered in December. The refinery, in its communication to customers, stated that all pending stock as of the effective time would be subject to the new pricing regime. The notice, titled ‘Communication on PMS Price Review,’ outlined the specific changes in pricing tiers and stressed that the new rates applied to both existing and future transactions.

The domino effect of the Dangote refinery’s price increase has been swift and wide-reaching, particularly in the downstream sector. Private depots, even those holding older stocks procured at lower prices, quickly adjusted their loading prices to reflect the new realities. In Lagos, private depots raised their prices to N970 per litre, while in Calabar, some depots went as high as N1,000 per litre. A closer look at individual depot price movements reveals consistent upward adjustments. For instance, Sahara Depot increased its loading price by N20, reaching N970 per litre, while Pinnacle Depot moved from N921 to N970. Similarly, Wosbab Depot revised its price to N965 from N940, and NIPCO saw an increase of N30, bringing its rate to N980 per litre.

The hike in depot prices is not limited to Lagos. Depots in other regions have also mirrored these changes. Alkanes Depot in Calabar now charges N1,000 per litre, while Zone 4 and Mainland depots have surpassed the N1,000 mark, hitting N1,005 per litre. These consistent price jumps indicate a direct correlation between upstream crude oil costs and downstream retail pricing mechanisms. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has confirmed that retail prices are set to climb even higher, with predictions that pump prices in Lagos and nearby states could reach N1,100 per litre. In remote areas and hinterlands, the cost could soar to as much as N1,150 per litre due to additional logistics expenses.

IPMAN’s National Publicity Secretary, Chinedu Ukadike, explained that rising global crude oil prices drive up domestic production costs, and with deregulation fully in effect, market forces now dictate fuel pricing. He pointed out that logistical costs alone add approximately N50 per litre, compounding the burden on consumers. The immediate impact of these adjustments reflects the real-time nature of crude oil price fluctuations and the dynamics of supply and demand in a deregulated market.

Similarly, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) noted that retail prices will inevitably exceed N1,000 per litre. According to PETROAN President Billy Gillis-Harry, retailers face additional charges from regulatory bodies like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which further influence the final pump price. He highlighted that while PETROAN members currently sell at N935 per litre under an agreement with MRS Oil, this arrangement remains subject to change based on market developments. Gillis-Harry also warned that projecting petrol prices accurately requires comprehensive analysis of various cost components, including production, logistics, and regulatory charges.

Oil and gas industry experts have attributed the significant influence of the Dangote refinery on fuel pricing to its dominant market position. Olatide Jeremiah, CEO of petroleumprice.ng, remarked that private depots and marketers must now compete with Dangote’s revised prices, ensuring a nationwide ripple effect on petrol costs. He added that Brent crude oil prices, which recently reached $81.84 per barrel—the highest in 2025—are a critical driver of the ongoing price increases.

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