Oil & Gas
Fuel Prices Climb Toward N1,000 Per Litre as Global Oil Shock Hits Nigeria
By David Torough, Abuja
Fuel prices across Nigeria have surged close to the N1,000 per litre mark, triggering concern among motorists and businesses, as regulators attribute the development to market forces while energy experts warn that global tensions could push prices even higher.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said fluctuations in the pump price of Premium Motor Spirit (PMS), popularly known as petrol, were the result of supply and demand dynamics under the country’s fully deregulated downstream petroleum sector.
Speaking in Abuja, the authority’s spokesperson, George Ene-Ita, said variations in fuel prices across retail outlets were not due to regulatory interference but reflected prevailing market conditions.
According to him, Nigeria has been operating a fully deregulated petroleum products market since the inception of the current administration, allowing market forces to determine pricing.
“Pump price vagaries are purely as a result of market dynamics,” Ene-Ita said, adding that deregulation was designed to encourage competition, efficiency and increased investment in the downstream oil and gas sector.
Across several cities, petrol prices have risen sharply in recent days. While the product previously sold between about N875 and N880 per litre in some locations, independent marketers now sell it for between N960 and N1,000 per litre or more. Stations operated by the Nigerian National Petroleum Company Limited (NNPC Ltd.) have also adjusted prices to around N960 per litre in many outlets.
In Lagos, checks showed prices ranging between about N1,005 and N1,040 per litre at different filling stations, with motorists scrambling to secure supplies amid fears of further increases.
Energy experts say the rising prices are largely driven by developments in the global oil market, particularly the recent surge in crude oil prices linked to geopolitical tensions in the Middle East.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the cost of crude oil remains the most critical factor influencing petrol prices.
He explained that global crude prices had jumped from about 65 dollars per barrel to nearly 92 dollars within a short period, raising the cost of refined petroleum products worldwide.
Yusuf noted that even domestic refineries were affected because crude oil used for refining was typically priced at international market benchmarks.
He added that although the Dangote Refinery is located in Nigeria, a significant portion of the crude it processes is sourced externally, making it vulnerable to global price volatility.
“About 70 per cent or more of the crude used by the refinery is sourced externally,” he said.
Despite the rising prices, Yusuf said the refinery had improved Nigeria’s energy security by stabilising supply and reducing the likelihood of the fuel shortages and long queues that once plagued the country.
“If we did not have the Dangote Refinery, the situation would likely have been much worse. Petrol could be selling for about N1,500 per litre or more,” he said.
Similarly, energy policy expert Prof. Ken Ife said Africa’s heavy dependence on imported petroleum products continued to expose the continent to global price shocks.
He said Nigeria currently had about 445,000 barrels of crude allocated for domestic refining but stressed that local refineries still required more consistent crude supply to operate at optimal capacity.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, also warned that escalating tensions around the strategic Strait of Hormuz were pushing global petroleum prices upward.
He explained that the maritime corridor accounts for nearly 30 per cent of global crude shipments and that persistent attacks and hostilities in the region pose significant risks to global energy supply chains.
According to him, before the crisis escalated petrol sold at about N774 per litre, but prices have since climbed to between N950 and N970 per litre, while diesel has risen sharply from about N950 to nearly N1,400 per litre.
He warned that if geopolitical tensions persist, petrol prices could approach N1,500 per litre while diesel may exceed N2,000 per litre, with severe implications for transportation, manufacturing and inflation.
Economic analyst Dr Chijioke Ekechukwu urged the Federal Government to mitigate the impact by supplying crude oil to local refineries at subsidised rates.
He said such a policy would allow refineries to produce and sell petroleum products locally at relatively stable prices while the country continues exporting crude oil at international market rates.
Ekechukwu also called for stricter enforcement of domestic crude supply obligations and tighter border controls to curb the smuggling of refined petroleum products to neighbouring countries.
According to him, strengthening local refining and safeguarding domestic supply will help shield Nigerian consumers from sudden price shocks in the global energy market.
Experts agree that until global oil prices stabilise and geopolitical tensions ease, Nigerians may have to contend with continued volatility in fuel prices.
The Organization of the Petroleum Exporting Countries (OPEC), has revised downward its 2026 global oil demand growth estimates, citing expected slower consumption growth in advanced economies, where collective demand will rise by only 100,000 barrels per day.
The cartel said it now expects global oil demand growth to reach 1.
2 million barrels per day in 2026, down from its previous forecast of 1. 4 million barrels per day, explaining that the revision would bring total global oil consumption to 106.3 million barrels per day.In Europe, oil demand will decline by 30,000 barrels per day as weaker economic activity weighs on consumption, OPEC, said in its monthly oil market report.
The OPEC also expects some Asian economies, particularly Japan, to record slower demand growth. The organization forecast Japanese oil consumption to fall by 80,000 barrels per day.
However, strong demand from major emerging economies partly offset these weaker signals.
The OPEC said China would add 250,000 barrels per day to global demand, supported by its petrochemical industry. The organization also forecast India to increase demand by 200,000 barrels per day, driven by infrastructure spending and growth in vehicle ownership. Overall, OPEC expects emerging economies and developing countries to contribute an additional 1.1 million barrels per day to global oil consumption in 2026.
The OPEC’s revision aligns with a broader reassessment of global oil demand expectations.
In its May 2026 report, the International Energy Agency projected a much sharper downturn. The agency forecast a contraction of 420,000 barrels per day in global oil demand for the full year rather than a slowdown in growth.
The gap between the two institutions now exceeds 1 million barrels per day, highlighting the uncertainty surrounding the market outlook.
Both reports identified the near-closure of the Strait of Hormuz as a major factor behind market instability. According to the U.S. Energy Information Administration, six Gulf countries collectively reduced production by 10.5 million barrels per day in April, marking what the agency described as an unprecedented contraction outside pandemic periods.
As supply shortages intensified, oil producers outside the Middle East moved to increase production to offset part of the missing volumes. Several African producers, including Nigeria, Libya and Angola, benefited from rising demand for Atlantic Basin crude among Asian and European buyers that lost access to Gulf oil supplies, according to the IEA.
However, not all African producers can fully capitalize on the opportunity. Nigeria, Africa’s largest oil producer and an OPEC member, nonetheless showed encouraging momentum. According to provisional data published on May 15 by the Nigerian Upstream Petroleum Regulatory Commission, the country increased oil production from 1.546 million barrels per day in March to 1.663 million barrels per day in April 2026.
The Nigerian Content Development and Monitoring Board (NCDMB) has reaffirmed that compliance with Nigerian Content regulations in the oil and gas industry remains non-negotiable.
The Executive Secretary of NCDMB, Felix Ogbe, stated this on Tuesday at the 2026 Nigerian Oil and Gas Midstream and Downstream Stakeholders Summit in Lagos.
Ogbe was represented by Austin Uzoka, Head of the Directorate of Planning, Research and Statistics.
He said the midstream and downstream sectors remained vital to Nigeria’s economic expansion, industrialisation and job creation efforts.
The summit focused on the theme, ‘Unlocking, Growing and Sustaining Nigerian Content Development in Nigeria’s Oil and Gas Midstream and Downstream Sectors.’
Ogbe described the gathering as a strategic platform for shaping the future direction of Nigeria’s energy industry and strengthening indigenous participation.
According to him, reforms, improved regulatory clarity and growing investor confidence are repositioning Nigeria as a leading oil and gas investment destination in Africa.
He noted that the Board, established under the Nigerian Oil and Gas Industry Content Development Act 2010, continued promoting local capacity development and technology transfer.
Ogbe added that the Board had also advanced employment opportunities for Nigerians across several segments of the oil and gas industry.
He said Nigerian companies had recorded significant achievements in upstream operations, particularly in exploration, drilling, engineering, fabrication and project management activities.
According to him, the next growth phase lies within the midstream and downstream sectors of the nation’s petroleum industry.
He identified gas processing, transportation infrastructure, storage facilities, LPG and CNG distribution, refining and petrochemical development as major investment opportunities.
Ogbe said Nigeria was gradually reducing dependence on imported refined petroleum products through increased local refining and processing capacity.
He described the Dangote Refinery as a strong symbol of Nigeria’s industrial ambition, energy independence and economic self-sufficiency.
Ogbe stated that modular refineries were equally opening fresh opportunities for indigenous participation, local investment and improved national energy security.
He also highlighted ongoing gas commercialisation projects as important drivers of industrialisation and value addition within the domestic economy.
The NCDMB boss specifically referenced the Nigeria LNG Train 7 project and the Federal Government’s Presidential Initiative on Compressed Natural Gas.
According to him, both initiatives would strengthen domestic gas utilisation and support broader industrial growth across the country.
While emphasising the Board’s regulatory responsibilities, Ogbe insisted that compliance with Nigerian Content requirements remained central to industry operations.
“Compliance remains non-negotiable, but it must also be practical, implementable and supportive of investment and business growth,” he said.
He urged policymakers, investors, operators and service providers to deepen collaboration in order to maximise opportunities within the sector.
Ogbe said stronger partnerships would help drive sustainable economic growth, industrial capacity and long-term competitiveness in Nigeria’s energy industry.
The two-day summit attracted major stakeholders from the oil and gas industry to discuss strategies for expanding local content development.
Participants also examined ways to strengthen industrial capacity and improve Nigeria’s competitiveness within the global energy market.
Dangote Petroleum Refinery has reduced the price of aviation fuel, also known as Jet A1, from N1,750 to N1,650 per litre.
The company said the move is aimed at reducing the financial burden on airline operators and ensuring steady fuel supply across the country.
The development was announced in a statement issued on Tuesday in Lagos by the company’s spokesperson, Anthony Chiejina.
According to him, the refinery also introduced a 30-day interest-free credit facility for marketers and airline operators backed by bank guarantees.
He added that the company had also changed its pricing structure from dollar-based transactions to payments in Naira, a move expected to ease pressure on local operators.
Chiejina stated that the reduction was necessary due growing concerns over the rising operational costs in Nigeria’s aviation sector.
According to him, aviation fuel accounts for a major part of airline expenses.
He said, “Industry stakeholders have repeatedly warned that the increasing cost of Jet A1 fuel was putting serious financial pressure on domestic airlines and threatening smooth flight operations.
“The refinery’s latest decision is expected to provide relief for airline operators by lowering fuel costs, improving operational stability and supporting efforts to reduce airfares for passengers.”
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