Oil & Gas
Nigerian crude stable as Trump accuses India of buying Russian crude, faces penalty
Nigerian crude remained steady at $73 after a three-day decline, as concerns grew over Russian supply risks, further intensified by US President Donald Trump’s escalating threats to penalize India for purchasing crude from Moscow, as reported by Nairametrics.
Brent fell below $69 a barrel after losing over 6% in the past three sessions, while West Texas Intermediate hovered near $66 a barrel.
U.S President’s comments about “substantially raising” tariffs on exported Indian goods due to Russian oil imports were an attempt to pressure Moscow into complying with a ceasefire concerning the Ukraine conflict, which drew strong opposition from New Delhi.
The US president issued his most recent warning to India just before his deadline of August 8 for Russia to agree to a truce with Ukraine.
Tass stated that Steve Witkoff, the US Special Envoy, is scheduled to travel to Moscow on Wednesday. After Russia’s invasion of Ukraine in 2022, India became the largest purchaser of Russian seaborne crude exports, quickly increasing purchases from nearly zero to roughly one-third of imports while snatching up discounted barrels avoided by Western countries. China is a significant buyer of oil from Moscow as well.
India’s ongoing demand for oil keeps Nigerian barrels in high demand, highlighting the impact of global supply chain shifts and new consumption patterns.
Nigeria’s crude oil production increases
The narrowing delta between Brent and Nigerian crude is a sign of increased market competition. A statement released on Monday by Nigeria’s upstream regulator stated that the country’s oil production averaged 1.8 million barrels per day.
Nigeria relies on increased crude oil production to finance its economy; the black viscous hydrocarbon constitutes over 80% of foreign exchange earnings and nearly two-thirds of government revenue.
Gbenga Komolafe of the Nigerian Upstream Petroleum Regulatory Commission said the output rise is from enhanced security measures and is part of an effort to boost oil production from 1 million to 3 million barrels per day.
Nigeria aims to increase its oil output, with a medium-term target of reaching 2.06 million barrels per day by 2027, according to Bayo Ojulari, CEO of the Nigerian National Petroleum Company (NNPC) Limited. He expressed confidence that by December this year, output could reach 1.9 million barrels per day.
Nigeria achieved full operational capacity on its major crude oil pipelines in June, a milestone Ojulari said was the first in many years and signaled improved system reliability and infrastructure security.
OPEC+ members to increase crude oil output
OPEC+ members’ decision to boost crude output at the start of the next month stems from the ongoing recovery of the global economy and fundamental market factors. Data from the August 3 meeting, which involved Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, showed they reaffirmed their commitment not to destabilize the market.
The phased responsive increase marks the fourth monthly hike in the 2.2 million bpd voluntary production cuts introduced in April and November 2023 in a bid to support prices during highly volatile market conditions.
OPEC explicitly supported the participants and quoted, “By the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from1 April 2025, the eight participating countries will implement a production adjustment of 547 thousand barrels per day in September 2025 from the August 2025 required production level.
” However, industry analysts are increasingly worried that this decision could put downward pressure on oil prices, which would negatively affect Nigeria’s oil revenues.
“Although there is a lot of discussion about tariffs on India, it is clear that there is a possibility that secondary tariffs will also be applied to other buyers,” said Patterson of ING. The more buyers are subject to these tariffs, the more difficult it is for the market to cope with the potential disruption.
If India’s purchases of Russian oil are interrupted, it might have to look for supplies elsewhere. Other OPEC+ countries, those in the Middle East, were able to make up for any potential shortfall, according to a recent note from Rystad Energy. The alliance agreed to start increasing production in September by about 547,000 barrels per day.
The Dangote Petroleum Refinery has once again reduced the depot price of Premium Motor Spirit (PMS), popularly known as petrol, from N838 to N820 per litre, as crude oil prices continue to decline and competition intensifies in Nigeria’s downstream market.
This latest price adjustment – an 18 naira drop – follows a broader trend in the domestic fuel market, triggered by a fall in global crude prices to $70 per barrel, down from over $77 in June 2025. The easing of geopolitical tensions, particularly the ceasefire in the Israel-Iran conflict, has contributed significantly to the dip in crude prices, thereby affecting refined product pricing globally.
Other key operators have also revised their depot prices, albeit marginally, in response to the shifting market dynamics. Data from PetrolPrice.com revealed that while Dangote made the most significant cut, other companies made smaller reductions:
Fatgbems: N837/litre (from N838), Integrated: N836/litre (from N837), Bovas: N836/litre (from N837), AIPEC: N837/litre (from N840) and First Royal: Maintained N838/litre.
In an interview with Vanguard, Olatide Jeremiah, CEO of PetrolPrice.ng, noted: “We are seeing a lot of dynamics in both global and domestic markets. With the ceasefire in the Israel-Iran conflict, crude oil prices have dropped to about $70 per barrel from over $77. Consequently, operators in the domestic market have adjusted accordingly. We look forward to more price changes in the coming weeks.”
This is not the first time Dangote Refinery has responded swiftly to international oil market shifts. In recent weeks, the refinery had cut the gantry price of petrol by 4.5%, bringing it down to N840 from N880 per litre, as oil prices slipped to $67.50 per barrel.
Nigeria’s fuel market has remained volatile in recent months, with petrol prices largely influenced by international crude trends due to the deregulation of the downstream sector. While Dangote’s refinery has played a stabilising role since it began domestic supply, volatility in crude benchmarks like Brent and Nigeria’s Bonny Light – which recently dropped from $80 to $68 per barrel – continues to impact product pricing.
The drop in depot prices may not immediately translate into a corresponding reduction at the pump for motorists due to other cost components like transportation, margins, and taxes. However, the move is expected to ease pressure on marketers and potentially curb further hikes in retail fuel prices, especially in the face of persistent inflation and currency instability.
With Dangote’s massive refining capacity and growing influence in Nigeria’s energy market, its pricing decisions are increasingly becoming benchmarks for others. The continued drop in depot prices could provide a cushion for consumers battling with high transportation and living costs.
Still, analysts warn that unless Nigeria’s forex volatility and logistics challenges are resolved, retail fuel prices will remain vulnerable to global oil market fluctuations. As more refined products hit the market from the Dangote Refinery and as international oil prices stabilise further, stakeholders are optimistic about a more predictable pricing regime in the coming months.
As the landing price undergoes a significant revision, Nigerians will face a new petrol pump price across the country.
Dangote Refinery has made a significant announcement regarding its pricing strategy by deciding to cease the sale of petroleum products in Nigerian naira.
As a major player in the oil and gas sector, this decision may have wider implications for the market, including fluctuations in fuel prices and impacts on consumers and businesses reliant on stable petroleum costs. Continue Reading.
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The price of importing premium motor spirit, commonly referred to as petrol, into Nigeria has risen to N885 per litre, an increase from the N797 per litre recorded just last week.
The Major Energy Marketers Association of Nigeria (MEMAN) confirmed this rise in its daily energy bulletin released on Wednesday. This marks an increase of N88 per litre within a week.
With this increase, petrol prices at filling stations may soon go beyond N1,000 per litre, up from the current range of N940 to N970 per litre.
Currently, the landing cost of petrol stands at N797 per litre, while Dangote Refinery’s ex-depot price is N815 per litre. This has resulted in retail prices at MRS filling stations in Lagos and Abuja ranging from N860 to N880 per litre.
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The Nigerian National Petroleum Company Limited has made a reduction to its ex-depot price of Premium Motor Spirit, commonly known as petrol, decreasing it from N1,020 to N899 per liter.
This decision, coming days after the Dangote Refinery reduced its price to N899, was confirmed by the Petroleum Products Retail Outlets Owners Association of Nigeria in a statement released on Saturday.
The statement signed by the association’s National Public Relations Officer, Dr Joseph Obele, and quoting a document released by NNPCL’s Commercial Department indicates a reduction based on the regional pricing scheme.
The price indicated that marketers would buy the product at N899 per litre, matching the price offered by the Dangote refinery a few days ago.
Marketers purchasing from Warri, Oghara, Port Harcourt and Calabar will, however, pay N970 per litre to offtake products.
The statement read, “The Nigerian National Petroleum Company Limited has taken a significant step in response to the competitive impact of deregulation in the downstream sector.
“The company recently reduced the ex-depot price of Premium Motor Spirit from N1,020 to N899 per litre.
“The price reduction by NNPCL is seen as a response to the competitive impact of deregulation, which has led to increased competition in the downstream sector.”
Obele noted that the price reduction by the national oil firm is seen as a response to the competitive impact of deregulation, which has led to increased competition in the downstream sector.
He also expressed optimism that PMS prices will drop further before the end of January 2025, given the global decline in crude oil prices and the naira’s recent gain against the dollar.
Obele described the trend as a price war while he emphasized that the price reduction by Dangote Refinery and NNPCL demonstrates the benefits of competition and advocates for the immediate privatization of government-owned refineries.
The move is expected to spark a price war among oil marketers, ultimately benefiting consumers.
However, the NNPCL spokesperson, Femi Soneye, is yet to confirm this development.
Reacting to this development, the National President of PETROAN, Billy Harry, said the price reduction is a welcome development that will bring relief to motorists and Nigerians during the holiday season.
He said, “The reduction in PMS price by NNPCL is a demonstration of the company’s commitment to making petroleum products more affordable for Nigerians.
“We commend NNPCL for responding to our call for affordable PMS prices.”
He also listed the benefits of the price reduction to consumers, including “Reduced transportation costs: With lower PMS prices, motorists will spend less on fuel, leading to increased disposable income.
“Increased economic activity: Lower fuel prices will stimulate economic growth by reducing production costs and increasing demand for goods and services.
“Improved standard of living: The price reduction will lead to a decrease in the cost of living, enabling Nigerians to afford necessities and enjoy a better quality of life.”
Harry also commended Dangote Refinery for its earlier price reduction, which he said had helped to stimulate competition in the downstream sector.
The PETROAN national official also hinted at a report submitted by PETROAN’s technical pricing team, warning that competitive pricing can lead to compromised product quality.
He further urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority to ensure compliance with quality assurance standards.
“PETROAN is calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to ensure compliance with quality assurance standards which may arise due to competitive pricing,” he added.
Heineken Lokpobiri, minister of state for petroleum resources (oil), says Nigeria will conform with the production quota set by the Organisation of Petroleum Exporting Countries (OPEC).
On June 2, OPEC extended Nigeria’s production quota of 1.5 million barrels of crude per day (bpd) to 2025.
OPEC said Nigeria should maintain the production level till December 31, 2025.
The oil cartel increased Nigeria’s production level to 1.5 million bpd for 2024 at its ministerial meeting on November 30, 2023.
However, Nigeria has been producing below the quota.
Speaking after OPEC’s 56th joint ministerial monitoring committee (JMMC) on October 2, the minister said Nigeria remains fully committed to the objectives of the body’s declaration of cooperation (DoC).
“Nigeria remains fully committed to the objectives of the DoC, and I can confidently confirm that our country is in conformity with the agreed production limits,” he said.
“While we continue to ramp up production in line with our national interests, we are doing so within the framework of OPEC’s guidelines, as we remain committed to balancing responsible production with our economic goals, and continue to meet our obligations under the DoC.”
OPEC RETAINS PRODUCTION OUTPUT POLICY
At the meeting, the oil cartel and its allies, known as OPEC+, retained its oil output policy, including a plan to start raising output in December.
According to a statement by OPEC, the group reviewed the crude oil production data for the months of July and August 2024 as well as current market conditions.
“During the meeting, the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation confirmed that they had achieved full conformity and compensation according to the schedules submitted for September,” the oil cartel said.
OPEC said the three countries reiterated their resolve to maintain full conformity and compensation throughout the remaining period of the agreement.
Final estimates of September’s crude oil production levels, according to the oil cartel, would be based on authorised secondary sources that would be accessible by the second week of October.
The oil alliance added that it will provide production figures for the nations that are part of the declaration of cooperation (DoC).
“The committee noted the three separate technical workshops between representatives from the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation and the secondary sources,” OPEC said.
“The meeting was aimed at discussing September production details and submitting their revised compensation plans that include the August overproduction as per the submitted plans to the OPEC Secretariat while also emphasising the need for some members to make further cuts to compensate for overproduction.
“The JMMC emphasised the critical importance of achieving full conformity and compensation. It will continue to monitor adherence to the production adjustments agreed upon at the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) held on 2 June 2024.
“The Committee will also continue to monitor the additional voluntary production adjustments announced by some participating OPEC and non OPEC countries as agreed upon in the 52nd JMMC held on 1 February 2024.”
Furthermore, according to OPEC, the committee would continuously assess market conditions.
OPEC said the next meeting of the JMMC is scheduled for December 1, 2024.
Petroleum marketers have raised an alarm that the Nigerian National Petroleum Company Limited, NNPCL, portal used for the purchase of Premium Motor Spirit (Petrol) has been shut down against dealers, making it impossible to apply for the commodity.
The spokesperson of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike disclosed this in a statement on Wednesday.
According to him, marketers have more than 2,000 pending tickets for the purchasing of 45,000 liters of petrol.
He hinted that the situation may lead to another round of fuel scarcity nationwide.
“I can’t confirm the price now because the portal is still shut down.
“We have more than 2,000 tickets for 45,000 liters (of petrol). That is 45,000 multiplied by 2,000, you can now know the number of million liters it will be. This is just an estimate, you know I don’t work with NNPCL and I don’t know what is on their system,” Ukadike stated.
He added that a 45,000-litre truckload of PMS is around N39.5 million, making N79 billion when multiplied by 2,000.
Reacting to the development, the spokesperson of NNPCL, Olufemi Soneye admitted that the state-owned firm has a significant backlog to address.
He said that the portal closure was intended to prevent the company from holding marketers’ funds for an extended period.
Soneye assured that the portal would soon be reopened; however, he failed to state the date when it would happen.
“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.
“It will be reopened once the backlog has been sufficiently reduced. We are working to address it as soon as possible,” he stated.
The development comes as Nigerians struggle with high energy costs.
Recall that NNPCL in September 2024 announced a fresh price increase for petrol nationwide after lifting the product from Dangote Refinery.
Nigerians currently buy petrol between N950 and N1,100 per liter nationwide.
The import of Automotive Gas Oil (Diesel) into Nigeria increased by 22.66 percent to 4.94 billion liters in 2023 from 4 billion liters in 2022.
The National Bureau of Statistics disclosed this in its latest Petroleum Products Distribution Data released recently.
The data also showed that 109.39 million liters of Diesel were locally produced in 2023, compared to 102.47 million liters reported in 2022.
This represents a 6.76 percent growth rate in locally produced diesel in Nigeria.
Comparatively, Nigeria heavily depends on the import of diesel to meet its consumption demand based on the NBS data for 2023.
On the other hand, the Data also showed that the import of Premium Motor Spirit (petrol) dropped 13.77 percent to 20.30 billion liters in 2023 compared to 23.54 billion liters in 2022.
Recall that in April 2024, Dangote Refinery commenced the domestic sale of diesel in Nigeria.
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