KEY POINTS
- Prices for Brent crude rise to $79.76 a barrel, putting a price on refined products.
- Diesel prices went up all over depots with the hope of more adjustments.
- Crude oil price surge is driven by geopolitics and seasonal demand.
An increased Brent crude oil price to $79.76 a barrel Sunday means refined petroleum product prices in Nigeria can only rise.
Global benchmark Brent crude has soared since $72.88 in December 2020, on heels of heightened geopolitical tensions and seasonal demand patterns.
Many Nigerian fuel importers depend on global markets to meet local demand, so any rise in the crude oil price has rebounded in refined products such as diesel and petrol.
The current increase could put pressure on stability pricing in the energy sector as the Federal Government’s oil price benchmark for the 2025 budget is N75 (about $75) per barrel.
Rising costs at fuel depots
Like elsewhere, fuel depots in Lagos have reported last week started adjusting diesel prices. On Friday, Nipco depot increased its price from N1,050 to N1,120 per litre with a N70 price rise. It was also the case at Prudent depot, which rose from N1,025 to N1,045 per litre.
The rise of Brent prices is a leading driver of the upswing, said Olatide Jeremiah, CEO of petroleumprice.ng. He said importers are likely to hike prices further given that ongoing rises in petrol and shipping costs have helped push Brent crude to nearly $80 a barrel.
Depot owners might also decide to go along with higher international crude costs, he added, which could cause other price adjustments to take place as early as Monday.
Factors that are driving Brent’s surge
The increase in Brent crude is attributed to several factors:
– Geopolitical Tensions: Global supply has become tighter because of sanctions on Russian oil exports.
– Seasonal Demand: Higher seasonal fuel consumption has occurred at colder regions.
These dynamics are likely to keep sustaining price pressure on oil prices across the globe including Nigeria where fuel is a major pillar for national growth.
