Oil prices rise again after Dangote reduces petrol by N100/litre

Oil prices rise again after Dangote reduces petrol by N100/litre

Global crude oil prices rebounded sharply on Wednesday, rising by about five per cent after briefly dipping to $88 per barrel the previous day, as escalating tensions in the Middle East continued to unsettle energy markets.

Data from the international market showed that Brent crude climbed to $92.43 per barrel as of 10:56am WAT, representing a 5.27 per cent increase. The benchmark had surged above $100 per barrel earlier in the week amid intensifying hostilities in the region.

The main United States oil contract, West Texas Intermediate, also rose sharply, gaining 5.9 per cent to trade at $88.38 per barrel.

The volatility in global crude prices came a day after the Dangote Petroleum Refinery announced a reduction in the price of Premium Motor Spirit (PMS), also known as petrol, in Nigeria.

The refinery’s Chief Communications Officer, Anthony Chiejina, told Channels Television on Tuesday that the gantry price of petrol had been cut by ₦100, dropping from ₦1,175 per litre last week to ₦1,075 per litre.

According to him, petrol supplied through coastal distribution channels will now sell at ₦1,050 per litre.

In a statement explaining the adjustment, the refinery said the price reduction was driven by movements in global crude oil prices.

“As responsible corporate citizens operating in a high-governance code and ethical environment, we believe it is imperative to reduce the price of our products as a reflection of the decline in global crude oil prices,” the company said.

The refinery noted that its crude supply is priced using international benchmarks with an additional premium of between $3 and $6, while foreign exchange payments are made at prevailing market rates without subsidy.

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It added that even crude supplied under the naira-for-crude arrangement is benchmarked against global prices before being converted to naira using the current exchange rate.

The latest price cut marks the first reduction after three consecutive increases that had pushed petrol prices significantly higher in recent weeks.

Earlier, the Chief Executive Officer of the refinery, David Bird, said the facility was not insulated from global oil market shocks because its crude purchases are tied to international pricing benchmarks.

The refinery’s move came after crude prices briefly fell to about $90 per barrel on Tuesday — the first decline since the outbreak of the latest Middle East conflict involving the United States, Iran and Israel.

The war has heightened concerns about potential disruptions to global oil supply, triggering sharp swings in crude prices and contributing to rising fuel costs in several countries, including Nigeria.

Speaking on the conflict, Donald Trump said the military campaign was progressing faster than initially expected.

“I think the war is very complete, pretty much. They have no navy, no communications, and they’ve got no air force,” the US President told CBS News in a telephone interview.

Trump added that the United States was “very far ahead” of the initial wartime timeline of about four to five weeks and suggested the conflict could end soon.

“It’s going to be ended soon, and if it starts up again, they’ll be hit even harder,” he said.

Oil prices rise again after Dangote reduces petrol by N100/litre