Nigerians may soon see a reduction in petrol and diesel prices following a significant decline in global crude oil prices. However, marketers of refined petroleum products caution that any price cuts at the pump may not happen immediately, as stability in crude prices must first be established.
Over the weekend, crude prices fell below $60 per barrel, with Brent Crude trading at $59.80 and West Texas Intermediate at $56.71 on Monday, according to oilprice.com. Nigeria’s Brass River and Qua Iboe blends were slightly higher at $64.60 per barrel, still well below the $75 per barrel benchmark projected in the 2025 national budget. This shortfall has sparked concerns about the viability of the government’s revenue plans.
Despite the potential revenue setback, many Nigerians are hopeful that lower crude prices will lead to cheaper fuel. However, both crude prices and foreign exchange rates are key determinants of local fuel prices.
Speaking to The Press, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, said a reduction in pump prices would depend on the stability and cause of the crude price drop.
“Petrol prices may decline, but not right away,” Ukadike said. “Oil traders are watching to see if this drop is due to natural market forces or temporary factors. If the trend continues for the next couple of weeks, we could then see adjustments in the prices of refined products.”
Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria, added that current fuel prices reflect earlier crude purchases made when prices were higher.
“There’s always a lag between crude price changes and pump price adjustments,” he said. “Even with lower prices, refiners may still be processing higher-cost crude. Over time, though, declining crude prices will affect the cost of inputs and eventually filter through to consumers—but not immediately.”
Meanwhile, global oil markets are reacting to recent developments within OPEC+. Oil prices dropped more than $1 per barrel on Monday after the group, which includes non-OPEC members like Russia, announced plans to accelerate production increases.
According to Reuters, the decision has raised concerns about oversupply in a market already facing uncertain demand. Brent crude and WTI recorded their biggest weekly losses since April, falling 8.3% and 7.5% respectively. The June production hike of 411,000 barrels per day brings the combined increase over three months to 960,000 bpd—undoing nearly half of the output cuts agreed upon since 2022.
Analysts note that while hopes for improved U.S.-China trade talks might support demand, oversupply concerns are currently driving market sentiment downward.
