The Nigerian National Petroleum Co. Ltd. (NNPCL) has increased the pump prices of petrol to N915 ($0.59) per litre in Abuja and Lagos as global crude prices rose in part due to events in the Middle East.

According to the Guardian, the price of petrol climbed 6.4% on June 23 from the previous N860 ($0.56) per litre that was offered in March this year.

The latest increases have also emerged following the removal of fuel subsidies by Nigeria, as market forces – including global oil prices and naira exchange rates – now determine the cost of petrol in the country.

Numerous industry sources have said that the increase is also down to changes in depot prices by 650,000 barrels per day (bpd) Dangote refinery, which raised its own rates thanks to increased crude prices and a turbulent exchange rate.

In contrast, the NNPCL’s decision to increase seems to align more with remaining competitive and minimising operational losses, according to the Guardian.

Similarly, another large-scale distributor of Dangote products – MRS Oil Nigeria Plc. – also raised its petrol price from N885 ($0.57) to N925 ($0.60) around June 21 in Lagos and around N955 ($0.62) in the country’s Southeastern regions.

Jide Pratt, energy analyst, remarked that numerous geopolitical tensions played a large role in pushing up prices – in particular, Iran’s threat to close the Strait of Hormuz, which would cause worldwide disruption if carried out. “Oil briefly touched $78 per barrel after the Iranian parliament’s announcement,” Pratt noted. “If the situation escalates, we could be looking at prices nearing $150 per barrel globally”.

The increase in costs of importing refined petroleum products into Nigeria is also due to the fact that the naira has remained weak, making foreign exchange more expensive for marketers.

Although Dangote refinery has begun to play a huge role in Nigeria’s domestic refining sector, analysts continue to suggest continued investment in the country’s refining sector to ensure a stable supply of fuel and prevent additional price hikes.