Petrol prices have increased sharply in Lagos and across various parts of Nigeria, as the direct impact of the suspension of the naira-for-crude deal by Dangote Refinery takes hold. MRS Oil & Gas, one of the country’s major fuel distributors, has raised its pump prices to N930 per litre in Lagos and N960 per litre in northern states, effective from March 28, 2025. This new price regime follows a surge in costs, with many other filling stations across the country implementing similar price hikes.
This price increase marks a N70 rise from the previous rate of N860 per litre in Lagos, N870 in other South-West states, and an N80 hike from the previous N880 per litre in northern Nigeria. The new pricing structure comes as a result of ongoing challenges in Nigeria’s fuel supply chain, particularly the suspension of petroleum product sales in naira by Dangote Refinery.
One of the most significant developments in the Nigerian petroleum sector in recent weeks has been the suspension of the naira-for-crude arrangement by Dangote Refinery. Under this deal, which allowed local refineries to purchase crude oil at a set price in naira, the Dangote Refinery had been a key player in securing fuel supply for the Nigerian market. However, the refinery recently halted this system due to mismatches between the naira payments made for crude and the actual sales it was able to process.
Sources within the oil industry suggest that the Nigerian National Petroleum Company Limited (NNPCL) has allocated large volumes of crude oil to settle debts with foreign creditors, further complicating the supply chain. This disruption has led to an increase in fuel prices as private depot owners, seeking to maximize profits amid tighter supply, have raised their prices. Consequently, Nigerians are feeling the pressure as petrol prices continue to climb.
According to MRS Oil & Gas, the new fuel prices will vary depending on location, with Lagos receiving the lowest rates. Petrol is now sold at N930 per litre in Lagos, while other South-Western states and Kwara are paying N940 per litre. The South-South and South-East regions, which include states like Edo, Abia, Akwa Ibom, Bayelsa, Rivers, and Enugu, will now pay N960 per litre. Northern Nigeria will face varying prices, with some states like Abuja, Kaduna, Benue, and Kogi selling at N950 per litre, while areas such as Zamfara, Kano, Jos, Bauchi, and others will pay as much as N960 per litre.
The situation is made even more complex by the Free Carrier Agreement (FCA) prices that determine the amount marketers pay for fuel before selling it at the pump. Lagos has the lowest FCA price at N905 per litre, while states in the northern parts of the country, such as Borno, Taraba, Adamawa, and Yobe, have FCA prices close to N888 per litre. These disparities in FCA prices contribute to the variations in petrol prices across different regions.
The hike in petrol prices is expected to have a ripple effect across the Nigerian economy, raising transport costs and, in turn, increasing the prices of goods and services. With higher fuel prices, Nigerians will face more expensive transportation fares, which could lead to higher costs for basic goods and services such as food and household items.
For many Nigerians, this price increase comes at a difficult time, as the country is already grappling with inflation and a struggling economy. The rising cost of fuel further strains the average citizen’s purchasing power and adds to the financial burdens faced by households.
Industry experts have warned that independent marketers, who are already grappling with fluctuating foreign exchange rates and high distribution costs, may continue to struggle with fuel availability in some areas. These challenges could lead to longer queues at petrol stations and further disruptions in the availability of fuel in the coming months.
The suspension of the naira-for-crude agreement has been a key factor in the rise in fuel prices. The deal, which had allowed Dangote Refinery and other players in the Nigerian oil industry to purchase crude oil in naira, was temporarily halted after discrepancies between naira payments and actual sales were discovered. The Nigerian government’s allocation of crude oil to foreign creditors to settle debts left local refineries struggling to secure the required crude to meet domestic demand.
As a result, private depot owners were left with limited stock and had no choice but to increase the price of fuel to maximize profits. This further impacted consumers, leading to widespread price hikes at filling stations.
Additionally, there has been a significant impact on supply chains, as many filling stations have had to adjust their prices to reflect the higher costs they are facing from suppliers. While some filling stations have maintained the previous prices, others, particularly in Lagos and the northern parts of the country, have started selling at N930 and N960 per litre, respectively.
Looking ahead, industry experts suggest that petrol prices could stabilize once the Dangote Refinery resumes its operations and begins selling fuel in naira, assuming it can secure enough crude oil from the Nigerian National Petroleum Company Limited (NNPCL). However, until that happens, Nigerians will likely continue to face rising costs at the pump, which will only add to the already challenging economic conditions.
The government and other stakeholders are under pressure to find a long-term solution to Nigeria’s fuel supply issues, which have been exacerbated by the fluctuations in crude oil prices and the complexities of the foreign exchange market. In the meantime, Nigerians must brace for further price hikes and the ongoing impact on transport and living costs.
