Higher fuel, transport, food prices loom as crude oil hits $100

By Udeme Akpan, Energy Editor

Nigeria may be heading for another round of inflationary pressure as crude oil prices climb above $100 per barrel following the escalating conflict between the United States and Iran, raising fears of higher petrol prices, increased transport fares and cost of living.

However, the Federal Government stands to earn significant unbudgeted oil revenue as a result of the development.

Nigeria’s Bonny Light crude traded above the $100 per barrel mark for the first time since May this year amid concerns that the Middle East crisis could disrupt global oil supplies. The region accounts for nearly one-third of the world’s crude exports, and any prolonged disruption is expected to keep prices elevated.

While the surge in oil prices offers a fiscal windfall for Nigeria, economists say the gains may be outweighed by the rising cost of living, as Nigerians are likely to bear the burden of higher fuel prices under the deregulated downstream petroleum market.

The 2026 Federal Government budget was benchmarked at a crude oil price of $64.85 per barrel, daily production of 1.84 million barrels and an exchange rate of N1,400 to the USDollar.

At current prices, Nigeria is earning about $35 more per barrel than projected, potentially generating billions of naira in additional revenue if production and exports remain stable.

However, the revenue gains may be moderated by lower-than-budgeted output. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), current oil production stands at about 1.7 million barrels per day, including condensate.

For consumers, the immediate concern is the likely increase in petrol prices. As international crude prices rise, import costs also increase, pushing up landing costs for imported fuel and forcing marketers to review pump prices upward.

Any increase in petrol prices is expected to trigger fresh hikes in transport fares, with knock-on effects on the prices of food, manufactured goods and other essential commodities across the country.

Commenting on the development, Managing Director of Petroleumprice.ng, Jeremiah Olatide, said the downstream sector has become increasingly volatile.

“With the resumption of loading by Dangote Petroleum Refinery in naira at N1,215 per litre on Wednesday, we expected fuel importers to reduce prices, and some actually did. However, the sudden spike in crude oil prices due to the Middle East crisis has disrupted that trend. We should expect more price instability in the coming weeks,” he said.

Similarly, National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), Mazi Colman Obasi, noted that while depots and filling stations had yet to implement widespread price increases, the impact could soon be felt across the economy.

Advertisement

“The implications will be far-reaching for households, businesses and the wider economy once operators across the value chain adjust their prices,” he warned.

Data from Petroleumprice.ng showed that before the latest crude price surge, several depots in Lagos, Warri and Calabar had reduced loading prices to attract customers, while prices in Port Harcourt remained largely unchanged. Pump prices at filling stations in Lagos and its environs currently range between N1,300 and N1,400 per litre, depending on location.