NIGERIA: Nigeria’s 30-day petrol price relief faces fresh uncertainty as global crude oil prices climb above $106 per barrel, raising concerns that renewed tensions in the Middle East could trigger further increases in domestic fuel prices.
Brent crude futures rose by $2.09, or two per cent, to $106.80 per barrel, while United States West Texas Intermediate (WTI) gained $1.93, or 2.10 per cent, to $93.78 per barrel, according to Oilprice.com data.
The surge comes despite the Federal Government’s extension of the N66-per-litre petrol discount offered by the Nigerian National Petroleum Company Limited (NNPCL), as escalating security threats in the Middle East fuel fears of disruptions to global oil supplies, reports The Guardian.
The discount, which runs until October 31, 2026, is available only to customers who pay digitally through the NNPCL mobile application.
Under the arrangement, NNPCL Retail’s pump price of N1,405 per litre is reduced to N1,339 for eligible customers.
However, the renewed rally in international crude prices has raised questions about how long the relief can be sustained, particularly as domestic fuel prices remain sensitive to changes in global oil markets, import costs and local refining economics.
The Strait of Hormuz, a strategic route for global oil shipments, remains a major concern amid the heightened tensions, with any significant disruption potentially exerting further pressure on international energy prices.
OPEC slashes 2026 demand growth forecast
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) has cut its forecast for global oil demand growth in 2026 by 71.4 per cent, lowering its projection to 400,000 barrels per day (bpd) from the 1.4 million bpd anticipated at the beginning of the year.
OPEC Secretary-General, Haitham Al Ghais, disclosed the revised outlook during a ministerial session titled Perspectives on Global Oil and Gas Markets at the 25th World Energy Congress in Riyadh, Saudi Arabia.
Despite the downward revision, Al Ghais projected that global oil demand growth would rebound to 1.7 million bpd in 2027, as some consumption deferred from this year is expected to materialise next year.
He attributed the changing outlook partly to declining Chinese oil imports following earlier inventory accumulation, releases from strategic petroleum reserves in several countries, particularly members of the Organisation for Economic Co-operation and Development, and slower-than-anticipated demand growth.
The revised forecast comes as oil-producing countries reassess market conditions and their implications for production planning, investment decisions and global energy security.
For Nigeria, the developments present a mixed outlook, as higher crude prices could improve export earnings while simultaneously increasing the risk of additional pressure on domestic petroleum prices.
Oil prices exceed Nigeria’s budget benchmark
The rally in crude oil prices also comes as Nigeria seeks to improve production and maximise petroleum revenues under its 2026 budget.
The Federal Government adopted a crude oil price benchmark of $64.85 per barrel for the 2026 budget, alongside a production assumption of approximately 1.84 million bpd and a production target of 2.06 million bpd.
At $106.80 per barrel, Brent crude is trading $41.95 above the budget benchmark, although actual government revenue will depend on production volumes, realised prices, costs and other fiscal factors.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that Nigeria produced approximately 1.5 million bpd of crude oil in August 2026, excluding condensates.
Combined crude oil and condensate production stood at approximately 1.678 million bpd.
The crude oil output was in line with Nigeria’s OPEC production quota of 1.5 million bpd, marking the fourth consecutive month the country met its allocation, according to the commission’s figures.
However, production remained below the government’s budget assumption and its more ambitious output target, highlighting the challenge of translating higher international oil prices into stronger revenues.
Lokpobiri urges stable energy policies
Amid the shifting global energy outlook, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has called on governments to establish predictable policies and protect investment agreements to sustain capital flows into the energy sector.
Lokpobiri made the appeal at the 17th International Energy Forum Ministerial Meeting in Riyadh, where he emphasised investor confidence, regulatory stability and long-term investment as essential conditions for reliable energy supplies.
According to a statement issued by his Special Adviser on Media and Communication, Nneamaka Okafor, the minister said: “I often say in Nigeria that capital is blind; it goes where it is welcomed.”
He urged governments to create transparent and dependable regulatory frameworks that encourage investment and safeguard existing agreements.
The minister, who co-hosted the meeting alongside Italy’s Minister of the Environment and Energy Security, Gilberto Pichetto Fratin, said energy security depended on strategic planning, resilient infrastructure and sustained investment in production capacity.
The developments underscore the delicate balance facing Nigeria as it seeks to protect consumers from rising fuel costs while maximising the benefits of higher crude oil prices and attracting the investment needed to expand domestic production.
