Rising Petrol Price to N1,300/Litre Raises Inflation Fears for Businesses
By Wellington Jopelo
Businesses across Nigeria are preparing for higher operating costs after the pump price of petrol rose to about N1,300 per litre in several parts of the country on Monday.
The increase followed a fresh price adjustment by the Dangote Petroleum Refinery, which raised its gantry price of Premium Motor Spirit from N995 to N1,175 per litre. The development has triggered fears of a fresh wave of inflation as companies review their budgets and pricing strategies.
Economists and members of the Organised Private Sector warned that the surge in fuel prices could push up the cost of goods and services, particularly transportation and food distribution.
The price increase is linked to rising global oil prices amid tensions involving the United States, Israel and Iran, which have disrupted energy markets and raised crude oil prices globally.
At several filling stations nationwide, petrol was sold between N1,250 and N1,400 per litre as marketers quickly adjusted pump prices following the refinery’s announcement.
Industry data also showed that the refinery increased the price of diesel to about N1,620 per litre, reflecting the rising cost of crude oil and global logistics.
Officials at the refinery said the adjustments were necessary due to volatile market conditions and increased operational costs tied to international crude prices, freight charges, insurance and financing.
They noted that the refinery operates at about 650,000 barrels per day and is fully exposed to global market conditions because crude oil is purchased at international benchmark prices.
Business leaders warned that the increase in petrol prices could worsen inflation by raising transportation and logistics costs across the economy.
The Director-General of the Lagos Chamber of Commerce and Industry, Dr Chinyere Almona, said rising fuel prices were already affecting food distribution and logistics costs nationwide.
She added that disruptions in global freight caused by the Middle East crisis could also increase the cost of imported goods, further worsening inflationary pressures.
The Director-General of the Nigeria Employers’ Consultative Association, Adewale Oyerinde, warned that higher energy costs typically lead to increased production and distribution expenses for businesses.
According to him, companies often pass these costs to consumers, leading to higher prices for goods and services and weakening purchasing power.
The President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, also said rising petrol prices would significantly affect manufacturing, transportation and logistics.
He warned that the continued rise in fuel prices would inevitably push up the cost of commodities and food items across the country.
Labour groups also criticised the latest price increase, with the Nigeria Labour Congress arguing that the development exposed weaknesses in Nigeria’s downstream petroleum sector.
The union said the country’s dependence on imported refined products means global oil market shocks still have a strong influence on local fuel prices.
Meanwhile, petroleum marketers said the surge in petrol prices could be temporary and may decline if global crude oil prices fall once geopolitical tensions ease.
Industry stakeholders have urged the Federal Government to strengthen local refining capacity and reduce Nigeria’s exposure to international oil market shocks.
They warned that unless domestic refining improves, global crises could continue to trigger sharp increases in fuel prices and inflation in Nigeria.