Nigeria: Petrol Nears N1,500 as Local Costs Outpace Crude Drop

Nigerian motorists paid as much as N1,310 per litre for petrol on Saturday, a jump of over N100 in a single day, even though global crude oil prices fell to $87.31 per barrel, underlining how disconnected local pump prices have become from international oil markets.

MRS, one of the country's major fuel marketers, moved its Lagos-area retail price to N1,310 per litre, up from N1,205, according to checks by Sunday Vanguard. Some competitors went further still, charging between N1,315 and over N1,400 per litre for the same product, formally called Premium Motor Spirit (PMS) but commonly known as petrol. If the increases continue at this pace, industry watchers say the pump price could reach N1,500 per litre in the coming weeks.

The price surge has puzzled some observers because it runs counter to what happened internationally. Brent crude slipped 0.47% to $88.10 per barrel on Friday, while West Texas Intermediate eased 0.16% to $83.40, according to data from OilPrice.com. Yet fuel prices at Nigeria's depots, the storage and distribution hubs that supply filling stations, stayed high, touching N1,217 per litre in some locations that same day.

Depot prices vary sharply by region

A breakdown from the Daily Depot Price Intelligence Report put Warri at the top of the price range, with petrol selling for N1,217 per litre, ahead of Port Harcourt (N1,214), Calabar (N1,204) and Lagos (N1,202). At the lower end, Calabar's Mainland and Soroman depots both sold at N1,203. In Warri, individual depots such as Matrix and Sigmund charged N1,217 and N1,215 respectively, while in Lagos, the Aiteo and Dangote depots were both priced at N1,200 per litre.

Industry analysts say this gap between global crude and local pump prices is not unusual, and reflects how many separate costs stack up before fuel reaches a filling station. These include refining margins, how much product is available domestically, the naira's exchange rate, shipping and marine logistics, storage fees, the cost of financing fuel purchases, taxes, and how aggressively different suppliers compete for customers. Crude oil is only one input among several, and its price movements rarely show up immediately or in proportion at the pump.

The picture across other crude grades was similarly uneven on Friday: Murban crude climbed 4.04% to $95.75 a barrel, the OPEC Basket rose 1.06% to $87.31, and the Indian Basket gained 1.53% to $89.52, even as the two most widely tracked benchmarks, Brent and WTI, both fell.

What happens next depends on local supply, not crude

On its Significance for Nigerian consumers, the disconnect carries real financial weight. If depot prices remain high while crude keeps falling, marketers may still raise or hold pump prices to protect their margins, especially given elevated transport and financing costs, a squeeze that would ripple into transport fares, food prices and broader inflation. That pressure could ease, however, if competition among domestic refiners intensifies and pulls more affordable, locally refined fuel into the market.

Whether the price stabilises or continues its climb toward N1,500 per litre will likely hinge on domestic refining output and depot-level competition in the weeks ahead, rather than on any further movement in international crude benchmarks.