Nigerians to Buy Fuel for Over ₦1000/litre Amid Us-Iran War

The Dangote Petroleum Refinery has raised its Premium Motor Spirit (PMS) gantry price by ₦101, moving the ex-depot rate from ₦774 to ₦875 per litre. The adjustment, confirmed by a senior refinery official on Monday, follows renewed volatility in global crude oil prices.

“Yes, the price has been reviewed,” the official said plainly. “The new gantry price is now ₦875 per litre from ₦774. The review became necessary due to changes in global crude fundamentals and replacement costs.”

In a deregulated market, that language carries weight. Replacement cost means one thing: refiners and marketers are calculating what it would cost to buy crude today, refine it, and restock tomorrow. If crude rises, prices must follow, or margins collapse.

Industry platform PetroleumPrice.ng reported that the new price had already been reflected in downstream benchmarks, signalling that the increase was not theoretical.

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Before the price hike was confirmed, the refinery had already made a decisive move.

Effective midnight on March 2, 2026, PMS loading was suspended. Product lifting stopped. Proforma Invoice (PFI) issuance paused. Fresh petrol transactions were effectively frozen.

The trigger? International crude prices climbing past the $80 per barrel mark overnight.

The suspension applied strictly to petrol. Automotive Gas Oil (AGO), better known as diesel, continued loading at that point. Almost immediately, several private depot owners across the country followed suit, suspending PMS sales during the trading day.

“Nobody wants to sell below replacement cost,” one downstream operator said. “The market is already pricing in risk premiums.”

That risk premium is largely tied to rising geopolitical tensions between the United States and Iran, with traders watching developments in the Strait of Hormuz. Roughly a fifth of global oil consumption passes through that corridor. Any perceived threat there tightens supply expectations instantly.

Nigeria, though Africa’s largest crude producer, remains heavily dependent on imported refined products. 

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has already raised an alarm. In a statement signed by its National Public Relations Officer, Dr Joseph Obele, the association’s National President, Dr Billy Gillis-Harry, described the Middle East tensions as a serious threat to energy-importing nations like Nigeria.

Their concern is simple: when crude prices surge globally, local pump prices eventually respond. Even with local refining capacity expanding, crude feedstock remains dollar-denominated. Exchange rate pressure compounds the effect.

READ ALSO: From Lagos to Sokoto: Widespread Protests in Nigeria After U.S.–Israel Strike on Iran

The Dangote Refinery has now suspended sales of Automotive Gas Oil (diesel). Its last known PFI price stood at ₦880 per litre. With sales halted, operators interpret the pause as a precursor to an upward revision.

In the downstream sector, when a dominant supplier stops issuing PFIs, the market does not wait.

As of March 2, major Lagos depots were loading diesel uniformly at ₦1,100 per litre. Integrated, African Terminal, Ibachem, Duport, Emadeb, First Royal, Swift, Ibeto and Wossbab all moved in near unison.

At 6:50 a.m. WAT, Brent crude traded at $79.73 per barrel, up 2.56 per cent. Brent is Nigeria’s benchmark. When it strengthens, feedstock becomes more expensive. Even locally refined diesel reflects dollar-based crude inputs, foreign exchange exposure, logistics, financing and operating costs.

Market participants now expect the refinery’s diesel ex-depot price to cross ₦1,000 per litre. With Lagos depots already loading at ₦1,100, anything significantly lower would distort the chain and strain supply.

Crossing that threshold would have consequences. Diesel powers haulage fleets, telecom base stations, factories, farms and small businesses. Higher ex-depot prices flow through transport fares, food distribution, manufacturing costs and ultimately retail prices.

Marketers are urging the Federal Government to sustain the Naira-for-Crude arrangement to ease foreign exchange pressures and reduce import exposure. They are also calling for the accelerated rehabilitation and full operation of Nigeria’s four state-owned refineries.

The logic is straightforward: stronger domestic refining capacity reduces vulnerability to external shocks.

For now, motorists in Lagos, Abuja and other major cities are preparing for further pump price adjustments, which may cause long queues at fuel stations.  The crude market remains unsettled. And in Nigeria’s deregulated downstream sector, price pauses rarely last long.