Petrol Price Increase Looms As Oil Hits $100/b, First Time Since July

Nigerians could be facing another round of petrol pump price increases after Brent crude, the international benchmark for oil, broke above $100 per barrel on Wednesday for the first time since July 23, driven by an escalation in the conflict between the United States and Iran.

Brent crude touched $100.45 per barrel in early trading on Wednesday, after two consecutive days of gains, having closed at $97.92 a barrel on Tuesday. The last time the benchmark closed at $100 or above was on July 23, at $100.69 per barrel. By mid-morning, the price had climbed further, trading at around $101 per barrel, according to data from Trading Economics.

The rally followed reports that Iran had struck two American vessels and eight oil tankers in the Gulf, while also warning shipping crews near Kuwaiti and Bahraini ports to abandon their vessels. The attacks came after the US struck five Iranian tankers near Kharg Island, the country’s main oil export hub. Iran-backed Houthi militants also targeted energy infrastructure in southern Saudi Arabia, including the 400,000-barrel-a-day Jazan refinery.

Nigeria’s Bonny Light, which forms part of the Organisation of Petroleum Exporting Countries (OPEC) basket, climbed 8.76 per cent to $106.30 per barrel, from more than $90 the previous day, according to market data.

Tamas Varga, an analyst at PVM Oil Associates, said oil investors were expressing their views on the latest escalation in the Middle East unambiguously.

He said the market’s reaction indicated that unless the Strait of Hormuz reopened and oil began flowing again without interruption, supply would not be aligned with demand for the foreseeable future.

He noted that OPEC+ had kept September production levels unchanged for October, meaning the market was not receiving an immediate additional supply cushion from the group. He added that the International Energy Agency’s latest assessment showed global oil supply was forecast to decline by 4.3 million barrels per day in 2026, with the third-quarter market deficit estimated at 1.8 million barrels per day.

The surge in crude prices comes at a time when Nigerian consumers are already grappling with elevated petrol prices. Depot prices for Premium Motor Spirit (PMS) in Lagos rose to between N1,266 and N1,280 per litre as of Tuesday, with Dangote Refinery and Pinnacle quoting N1,266 per litre, MRS at N1,267, and Aiteo, Integrated and Sahara at N1,270. Retail pump prices in Lagos and Abuja remain at N1,325 per litre in some locations, even as depot prices have fluctuated.

Dangote Petroleum Refinery had earlier raised its diesel gantry price by N100 per litre from September 4, days after a N65 per litre increase in its petrol price, reflecting the pressure of rising input costs on local refiners.

Industry stakeholders, including the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), have called on the government to intervene, arguing that addressing supply and distribution challenges is critical to easing pressure on petrol prices.

Analysts said the immediate impact of Brent’s rise above $100 will depend on how long prices stay elevated, and whether disruptions to global supply worsen or ease. For Nigeria’s economy, the price surge cuts both ways: while it widens the gap between international oil prices and the country’s 2026 budget benchmark of $64.85 per barrel, offering a potential revenue windfall, it also raises the risk of higher landing costs for imported and locally refined petroleum products, deepening the burden on households and businesses already contending with high transportation and operating costs.