Nigeria’s 650,000 barrels per day (bpd) Dangote Refinery increased its petrol price by NGN101 ($0.073) this week to NGN875 ($0.63) per litre from NGN774 ($0.56) per litre, sparking concerns about the cost of living.

According to The Punch, which cited a senior official at the refinery, petrol prices were raised due to volatility in global crude oil prices. “The review became necessary due to changes in global crude fundamentals and replacement costs,” the official noted.

Dangote’s decision to raise petrol costs was made on March 2 and followed a significant increase in international crude oil prices, which had climbed past $80 per barrel.

According to data provided by the industry, petrol loading was stopped overnight as the prices were adjusted, although diesel continued to be loaded for sale.

Notably, since the price adjustment, numerous private depot owners also opted to follow Dangote’s lead and halt petrol sales temporarily, with a downstream operator quoted as saying: “Several depot owners suspended PMS sales because of the crude rally. The market is already factoring in risk premiums. Nobody wants to sell below replacement cost.”

Rapid changes in the pricing of fuels in Nigeria have come down to increased instability in the global oil market as the US and Israel launch their attack on Iran, with the latter opting to close the Strait of Hormuz and strike energy infrastructure across the Middle East as part of its retaliatory strikes.

As a result, a significant amount of trade has been disrupted, leading to shortfalls and price increases. According to five energy experts cited by The Punch, fuel prices in Nigeria could continue to rise further – particularly if crude climbs past $90 per barrel.

Moreover, experts also highlighted that hostilities in the Middle East would continue to affect global supply chains and would raise import and refining costs for products and increase insurance costs across Nigeria.