High global oil prices may push up transport, power costs

Agency Report

Fuel prices in Nigeria are once again edging upward, with new data from the Major Energies Marketers Association of Nigeria (MEMAN) confirming a sustained rise across key petroleum products. Despite a modest appreciation of the naira, the pressure on domestic pump prices shows no sign of easing.

According to MEMAN’s latest bulletin, the Import Parity Price (IPP) for Premium Motor Spirit (PMS) at the NPSC/ASPAM Jetty in Apapa has surged to ₦870.06 per litre, up from the 30-day average of ₦848.77. Automotive Gas Oil (diesel) is now pegged at ₦999.80 per litre, compared to ₦969.09 previously, while Aviation Turbine Kerosene has jumped to ₦980.75 from ₦905.40.

The increase reflects ongoing volatility in the global petroleum market, where supply and demand dynamics continue to shift sharply. U.S. crude inventories fell by an estimated 9.3 million barrels to 415.4 million, pushing net imports to record lows as exports rose unexpectedly. Gasoline stocks also dipped by 2.3 million barrels, further tightening supply, while distillate inventories rose by about 4 million barrels, signalling a softening in demand.

On the international stage, Brent Crude is currently trading at $67.44 per barrel, West Texas Intermediate at $63.24, and Nigeria’s Bonny Light at $68.56. While a slight easing was observed following the U.S. Federal Reserve’s decision to cut rates by 25 basis points and geopolitical risks remain elevated. Ukrainian drone strikes on Russian oil facilities and OPEC+ plans to boost output by 137,000 barrels per day from October are adding to the uncertainty.

At home, the naira has shown relative resilience in the Nigerian Foreign Exchange Market. It strengthened from ₦1,526 per dollar at the start of September to ₦1,498.98 by the 18th, even touching ₦1,484.14 mid-month before retreating. Still, MEMAN warns that parity costs remain highly sensitive to international fluctuations, with daily price adjustments now a strong possibility.

For now, ex-depot prices from the Dangote Petroleum Refinery list diesel at $717.50 per metric tonne (₦960.00 per litre) and aviation kerosene at $766.25 per metric tonne (₦995.48 per litre), while PMS remains on hold. Liquefied Petroleum Gas (LPG) has also risen sharply, reaching ₦715,000 per metric tonne.

The latest upward swing in fuel costs underscores the tightrope Nigeria must walk in, balancing domestic stability against global market turbulence. While the naira’s appreciation offers some relief, the broader picture signals a prolonged period of high prices for motorists, airlines, and households alike. With international supply chains unsettled and OPEC+ recalibrating output, Nigerians should brace for continued volatility at the pumps and beyond.