M-East war: Homes, factories, others hard hit as cooking gas, deisel prices rise

2026-03-04 - 04:07

—Crude oil prices leap further to $84 per barrel —Dangote refinery, oil marketers adjust prices —Expect more increases, hard times By Udeme Akpan, Energy Editor, Obas Esiedesa, Ediri Ejor and Mariam Eboh LAGOS — Nigerian homes, businesses and others are in for harder times following sharp increases in the retail prices of Liquefied Petroleum Gas, LPG, also known as cooking gas; Automotive Gas Oil, AGO, known as diesel, and petrol, as a consequence of the Middle East crisis. Gas price increased to N1,200 per kilogram from N1,000 per kg and diesel, N1,300 per litre from N1,200 per litre, respectively. Also, the price of fuel or Premium Motor Spirit, PMS rose to N939 per litre from N837 per litre, yesterday, and there are fears of it rising above N1,000, if the Middle East crisis lingers. Meanwhile, crude oil price rose to $84 from $75 per barrel last week in the global oil market, after the Iranian Revolutionary Guard Corps, IRGC, said that the Straits of Hormuz would be blocked, following on-going attacks on the country by Israel and the United States of America, USA. It will be recalled that Israel and the US, Saturday morning commenced attacks on Iran, despite on-going talks between Iran and US, which was to have continued on Monday. And in keeping with its threat, Iran started retaliating by attacking US military bases and other targets in the Gulf region. A market survey conducted by Vanguard, yesterday, in Abuja, Lagos and some other parts of the country, showed that several filling stations adjusted their pump prices upward, from N875 per litre on Monday to N975, yesterday, while retailers of cooking gas hiked price. The increase in fuel prices and hardship are direct consequences of the US, Israel and Iran war, culminating in crude oil prices rising by more than 12 per cent to over $84 per barrel, yesterday, from $75 per barrel last week in the global oil market. Checks by Vanguard indicate that the hardship is very severe on low-income homes and small-scale businesses with little resources that neither expected nor planned for the development. The checks showed that tensions disrupted navigation and a shortage of available tankers have pushed storage tanks in southern export terminals toward critical levels, forcing production reductions. Dangote refinery, marketers hike prices The price spike started when the 650,000 barrels per day, bpd Dangote Petroleum Refinery, announced increases in depot prices of cooking gas, diesel and petrol, in response to rising crude oil price in the international market. On their parts, depot owners and oil marketers across Nigeria also increased the price of cooking gas, diesel and petrol by an average of N100 per litre or kilogram. Crude oil prices leap further to $84 per barrel For instance, the price of Nigeria’s Bonny Light crude has surged to $84 per barrel, its highest level since July 2025, following strikes on Iran by the US and Israel, which have disrupted crude oil shipping traffic from the Middle East to the global market. Brent crude rose to $84.53 per barrel from $80 per barrel, Murban crude climbed to $83.72 per barrel from $81.05 per barrel, while West Texas Intermediate (WTI) increased to $77.16 per barrel from $72.24 per barrel. The fresh rally comes amid escalating attacks on Iran by the US, Israel, as Iran fires back at Israel, with fears of prolonged hostilities tightening global supply expectations. After an initial 10 per cent jump on Monday, oil prices continued their upward trajectory after US President Donald Trump said the war in Iran could last much longer than earlier anticipated. “Whatever it takes, right from the beginning, we projected four to five weeks, but we have the capability to go far longer than that,” US President, Donald Trump, told newsmen on Tuesday, speaking for the first time after the attack on Iran. In a dramatic escalation, Iran announced the closure of the Straits of Hormuz, warning that any vessel attempting to pass through the strategic waterway, which handles about one-fifth of global oil and gas trade is at risk. Expect more increases, harder times — CPPE Reacting in an interview with Vanguard, yesterday, to the development, Dr. Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise, CPPE, lamented huge impact on the Nigerian economy as crisis persisted. He said: “Energy markets are the first transmission channel. Of particular strategic importance is the Straits of Hormuz, through which roughly 20 per cent of global crude oil supply is transported daily. Any disruption to this corridor has immediate implications for global oil prices, shipping costs, insurance premiums, and supply chains. There is also the output disruption effect, as Middle East countries are major oil producers. “For Nigeria, an oil-dependent economy where crude accounts for over 85 per cent of export earnings and about half of government revenue, the implications are significant. The effects will be both positive and adverse, depending on the duration of the conflict and the quality of domestic policy responses. “Geopolitical tensions in the Middle East historically trigger sharp increases in crude oil prices due to fears of supply disruptions. Even speculative risks around the Straits of Hormuz typically generate price volatility of $5–$15 per barrel within short periods. “For Nigeria, every increase in crude oil price translates into additional export earnings and fiscal revenues. The immediate benefits include: Higher crude export receipts, improved foreign exchange inflows, strengthening of external reserves and increased FAAC allocations to all tiers of government. “However, revenue gains are critically dependent on production levels. Nigeria’s current crude output has fluctuated around 1.4–1.6 million barrels per day, below installed capacity and vulnerable to oil theft, pipeline vandalism, and under-investment in upstream infrastructure. Without a sustained improvement in production efficiency and security, Nigeria may not fully optimise any price windfall. “There is also a medium-term risk. If the conflict escalates and dampens global growth, oil demand could weaken, leading to price corrections. The fiscal upside is therefore inherently fragile.” FG should plan to ease sufferings of the masses — OGSPAN On his part, the National President of the Oil and Gas Services Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “There is no doubt that many people and small-scale businesses have started to suffer. There is a great need for government to introduce interventions that can alleviate the pains. This is more so as government stands to generate additional foreign exchange from the sale of its crude oil in the global market.” Others express mixed reactions Other stakeholders are divided over the potential impact of the increase in crude oil price at the international market on the Nigerian economy and petrol pump price in the domestic market. The stakeholders noted that while the rise in crude oil price will be good news for government revenue, it has the potential to increase the general price level in the country due to rise in the price of petrol and transportation cost. Speaking to Vanguard, Partner at Kreston Pedabo, Mr. Olufemi Idowu, said while higher crude oil prices will impose additional costs on consumers, they will also boost government revenue. Idowu said: “I look at this from two perspectives. First is the implication for the country. We cannot deny the fact that crude oil exports remain our major source of revenue. An increase in international crude oil prices is therefore positive for government earnings and budgeting.” He warned that the impact on consumers will be significant, especially in a deregulated market. He said:”On the other hand, from the consumer perspective, the implication is clear. With deregulation and the removal of subsidy, a rise in crude oil prices makes an increase in petrol pump prices very likely.” He stressed that the knock-on effects would extend to daily commuting and general cost of living, further worsening inflation. “When prices of goods and services rise, purchasing power declines. This situation will inevitably lead to higher inflation, as more money chase fewer goods,” he said. He explained that higher fuel prices would have multiplier effects across the economy. “Transportation costs are likely to rise. Construction materials will become more expensive due to higher logistics costs, and production costs will increase. Ultimately, this will affect consumer goods prices across the board,” Idowu added. Also speaking, Public Relations Officer, Independent Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike said with depots and Dangote Refinery price rising, marketers had no option but to increase their pump price. “Our prices are determined by the cost at which we load and then other costs like transportation and operations have to be factored into the overall cost,” he said. Ukadike stated that consumers will have to bear the cost ultimately as independent marketers were already struggling to operate profitably. More industries should embrace gas — Coleman Similarly, Mr. George Onafowokan, Managing Director/CEO of Coleman Wires and Cables, said: “Many industries have shifted to gas with long term agreements and plans, meaning that such organisations will experience minimal negative impact. “But industries that still depend on petroleum products like petrol and diesel will experience severe pressure. I would advise them to shift to gas. But Nigerians should commend the Dangote Petroleum Refinery because our current huge domestic capacity means that our problems would have been more if we did not have that refinery operating.”