Petrol price may hit N1,000 as Middle East crisis escalates
Prices of Premium Motor Spirit (PMS) generally known as petrol are projected to increase to N1,072 a litre as the conflict in the Middle East could push prices of crude oil to $100 per barrel. Daily Trust reports that the conflict has already triggered a massive price surge with Brent Crude nearing $80 per barrel […]
Prices of Premium Motor Spirit (PMS) generally known as petrol are projected to increase to N1,072 a litre as the conflict in the Middle East could push prices of crude oil to $100 per barrel.
Daily Trust reports that the conflict has already triggered a massive price surge with Brent Crude nearing $80 per barrel on Monday.
Brent Crude was $79.39 per barrel in the morning before easing to $77.07 as of press time yesterday with President Donald Trump hunting the conflict may last longer for four weeks.
Global oil market data published by Reuters showed that the crisis is pushing the fuel price to $3 per gallon, corresponding to N1,027 per litre.
The market impact of the war is a double-edge sword for Nigeria’s economy, which, due to the higher crude oil price, is expected to also earn more revenues.
Nigeria has fully deregulated its downstream sector, a move that has placed the prices of refined products majorly at the mercy of the International market.
The conflict has led to a sharp increase in global oil prices, with Brent crude jumping 10% to around $80 a barrel, and analysts predicting it could hit $100 if the situation worsens.
What experts are saying
Reacting, energy policy analyst, Dr. Adeola Yusuf, called for an end to the war due to its political economic impact on many countries including Nigeria.
“The social media is awashed with many supporting the conflicts and hailing an attack or counter-attack depending on the side they claimed to support. What is best to be done is to call for and pray for an end to the hostilities because they have ripple effects on everyone.
“For instance, Nigeria did not pull a trigger but everyone in the country will feel an impact. This is because the conflict will have a double-edge-sword effect on the country. A forecast shows that while on one hand our nation’s accruable revenue from oil will surge, the prices of refined products will, on the other hand, skyrocket.
On his Dr Muda Yusuf, the Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE) told Daily Trust that the geopolitical tensions in the Middle East historically trigger sharp increases in crude oil prices due to fears of supply disruptions.
He said the effects of the conflict will be both positive and adverse, based on the duration of the conflict and the quality of domestic policy responses.
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 underinvestment in upstream infrastructure, he said.
Also, Chief Executive Officer of AHA Consultancies, Ademola Henry Adigun, stated that the conflict will create more disruption in the market and instability in the Middle East.
He added: “There will be a rise in oil prices that will benefit Nigeria in revenue but lead to a rise in product prices.”
However, a procurement expert, Mohammed Bouigie Attah, said that global oil markets could become very volatile on account of the conflict
Nigeria, he hinted, will not be spared of the oil volatility, though the country will benefit from the turmoil, particularly, if it’s very strategic in its resource management.