Fuel prices in Nigeria may be headed lower in the coming weeks following a sharp decline in global crude oil prices triggered by easing tensions in the Middle East.
The drop in international oil prices comes after diplomatic efforts led to a ceasefire agreement involving key regional actors, helping to calm fears of supply disruptions around the strategic Strait of Hormuz, one of the world’s most important oil shipping routes.
During the height of geopolitical tensions, crude oil prices surged above $120 per barrel amid concerns that shipping lanes could be disrupted. However, as tensions eased and energy markets stabilized, Brent crude fell below the $80-per-barrel mark, reducing pressure on refiners and fuel importers.
The decline in crude prices has already begun to reflect in Nigeria’s downstream petroleum sector, with the Dangote Petroleum Refinery announcing a reduction in its gantry price for Premium Motor Spirit (PMS), commonly known as petrol.
The refinery lowered its ex-depot price by ₦75 per litre, bringing the rate down from ₦1,250 to ₦1,175 per litre.
Several independent depot operators have also adjusted their prices downward in response to market conditions. Industry data show that depots including Rainoil, A.A. Rano, NIPCO and Bono Energy have all implemented varying reductions in their wholesale prices.
Market analysts say the price cuts are being driven by lower crude acquisition costs and increased competition among suppliers.
Despite reductions at the wholesale level, pump prices at many filling stations across the country have remained relatively unchanged, with petrol still selling between ₦1,280 and ₦1,300 per litre in several locations.
Industry stakeholders attribute the delay to existing fuel inventories purchased at higher prices during the period of elevated crude costs.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) said marketers are gradually selling off older stock before passing on the latest reductions to consumers.
According to IPMAN National Publicity Secretary, Chinedu Ukadike, retail prices are expected to begin adjusting downward once existing inventories are exhausted.
The decline in global oil prices is expected to provide relief for businesses and households facing high transportation and energy costs.
Diesel prices have also reportedly begun to fall at major depots, offering potential savings for manufacturers, transport operators and small businesses that rely heavily on diesel-powered generators.
However, economists note that lower crude prices present a mixed outlook for Nigeria. While cheaper fuel could help ease inflationary pressures and reduce operating costs, declining oil prices may also affect government revenue, given the country’s dependence on crude oil exports.
Analysts say the direction of fuel prices in the coming months will largely depend on the stability of the ceasefire and the continued normalization of global energy supply chains.
If current market trends persist, motorists and businesses could see further reductions in fuel costs before the end of the third quarter.
