Nigeria is facing renewed pressure on energy costs as disruptions to global oil supplies push crude prices higher, raising concerns over petrol, diesel, transport and production costs across the country.
Brent crude rose to $108.75 per barrel on Tuesday, its highest level in months, after disruptions to Saudi Arabia’s oil infrastructure heightened concerns about global supplies. Prices eased slightly on Wednesday after Saudi Arabia offered additional crude shipments through Oman, but supply risks remain amid the continuing Middle East conflict.
The pressure could translate into higher operating costs for manufacturers, transporters, farmers, logistics companies and businesses that rely on diesel and other petroleum products. Higher energy costs could also add pressure to food and transport prices at a time when Nigerian households are already dealing with elevated living costs.
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The development comes as Dangote Petroleum Refinery raised its petrol gantry price from N1,265 to N1,350 per litre, effective September 12. The N85 increase was the refinery’s fourth reported upward adjustment since August 21.
President and Chief Executive of Dangote Refinery, Aliko Dangote, attributed the latest increase to higher international market costs, crude acquisition expenses and rising freight charges.
Dangote said the previous N1,265 price had become unsustainable for market participants, particularly fuel importers.
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“At N1,265, none of the importers were able to sell. They were at a standstill because if they sold, they would record a big loss,” he said.
He said the refinery had initially waited for international prices to decline but had to adjust its price after the expected reduction failed to materialise. Dangote added that the refinery had purchased crude in May at $124 per barrel and could not absorb every increase in international market costs.
“We cannot subsidise everything,” he said, explaining that the refinery could not sell below the prevailing traded market price while also purchasing crude without a special discount.
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Dangote also pointed to rising freight costs amid the Middle East crisis and disruption to shipping routes, saying the cost of transporting crude from Forcados to Lagos had at one point reached almost $4 million.
Despite the pressure, Nigeria’s growing refining capacity could provide some protection against international supply shocks. The Dangote refinery has increased exports of diesel, gasoil and jet fuel as disruptions in the Middle East tighten fuel supplies in Europe and other markets.
The International Energy Agency has warned that global oil supply disruptions could deepen in 2026, with conflicts and attacks on energy infrastructure reducing available supplies and pushing refined fuel prices higher.
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For Nigeria, the direction of international crude prices, the duration of the Middle East disruptions and the ability of local refineries to maintain supply will remain key factors in determining whether energy costs come under further pressure.
By Onabanjo Boluwatife Ifeoluwa
boluwatifeonabanjo3@gmail.com