Nigerians may be facing fresh round of fuel pump price increases as global crude oil prices record momentary uptick on the back of escalation in US-Iran war.
Yesterday, global crude oil prices jumped to a four-year high of $126.41 per barrel from $115 per barrel the previous day, the highest level since March 9, 2022, on concerns over a possible escalation of the U.S.-Iran conflict, but it later retreated to $114 per barrel.
Tensions heightened after Israel's Defence Minister, Israel Katz, said: "It is possible that soon we will need to act again in Iran to ensure that the regime cannot threaten Israel for years to come".
According to Reuters, "Global oil benchmark Brent crude futures rose as high as $126.41 per barrel-the highest since March 9, 2022-but by 13:27 GMT had fallen by $4.14, or 3.5 per cent, to $113.89.
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"The prompt contract for June delivery expires on Thursday, while the more active July contract traded at $108.70, down $1.74, or 1.6 per cent.
"WTI crude futures fell by $2.28, or 2.1 per cent, to $104.60, after earlier reaching $110.93, the highest since April 7.
"Both benchmarks are on track for their fourth consecutive monthly gains, reflecting fears that the Iran conflict could choke global oil supplies for months to come."
Reacting to the development, taahe Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, said: "For Nigeria, the implications are immediate. Higher crude prices directly increase the cost of importing refined petroleum products, including petrol, diesel, and aviation fuel. "This puts fresh pressure on landing costs and sharply raises replacement costs for downstream marketers.
"A fresh round of depot price hikes now appears unavoidable. Across the downstream market, marketers are already adjusting projections for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Aviation Turbine Kerosene (ATK). The impact is imminent, with upward price reviews expected across major depots if crude prices remain elevated.
"The expected increase will likely reverberate across the domestic market, affecting pump prices, transport costs, airfares, and broader inflation. Unless global supply concerns ease soon, Nigerian consumers and businesses should brace for renewed pressure across the petroleum value chain."
Checks by Vanguard indicated that the price of Premium Motor Spirit (PMS), also known as petrol, has risen to N1,300 per litre from N1,250 per litre at many filling stations in Lagos and its environs.
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Reacting, the National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), Mazi Colman Obasi, said: "Instability in the global oil market will continue to impact Nigeria's domestic market until the U.S.-Iran conflict ends. As long as the war persists, volatility will remain."
