OIL BARREL
Fuel prices in Nigeria could soon witness a significant decline, with industry stakeholders projecting that petrol may sell for as low as ₦900 per litre if the proposed peace agreement between the United States and Iran is successfully concluded and global crude oil prices continue to fall.
The optimism follows a sharp drop in international oil prices, which have declined from over $120 per barrel in April to about $87 per barrel. Market observers say the continued easing of crude prices, alongside plans to reopen the strategically important Strait of Hormuz, could create favourable conditions for lower fuel costs, including petrol, diesel, and aviation fuel.
The recent Middle East tensions had pushed fuel prices higher in Nigeria, with petrol rising from about ₦830 per litre to as much as ₦1,300 per litre. Diesel and aviation fuel also experienced substantial increases, placing additional pressure on businesses and prompting concerns from airline operators over rising operational costs.
Reflecting the downward trend in crude oil prices, the Dangote Petroleum Refinery recently adjusted its ex-depot petrol price from ₦1,275 to ₦1,250 per litre, while diesel was reduced from ₦1,800 to ₦1,700 per litre. Sources familiar with refinery operations indicated that additional price reductions may be possible, although existing crude oil inventories acquired at higher prices could slow the pace of any immediate cuts.
The Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) has also expressed confidence that petrol prices could fall below ₦1,000 per litre once the Strait of Hormuz is fully reopened. According to PETROAN’s Publicity Secretary, Joseph Obele, petrol was selling for approximately ₦800 per litre before the conflict escalated earlier in the year, and a return to that price range remains achievable if market conditions improve.
Adding to market expectations, US President Donald Trump announced on Saturday that a peace agreement with Iran would be signed on Sunday, paving the way for the reopening of the Strait of Hormuz to global shipping. He stated that the deal would help prevent Iran from acquiring nuclear weapons while promoting stronger relations across the Middle East.
Meanwhile, market checks indicate that some fuel marketers in Nigeria have already lowered their ex-depot prices to below ₦1,250 per litre, raising expectations of renewed competition in the downstream sector. Industry operators believe that if the peace deal holds and crude oil prices remain stable at lower levels, consumers could begin to enjoy more affordable fuel prices in the weeks ahead.
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