Brent crude oil prices have surged past $107 per barrel on September 28, marking a significant rebound that could impact fuel prices across Nigeria. This increase follows a week of declining depot prices for petrol and diesel, raising concerns among consumers and industry stakeholders alike.

The price of Brent crude rose by $2.92, or 2.80%, reaching $107.20 per barrel, while West Texas Intermediate (WTI) also saw gains, climbing $2.27, or 2.46%, to $94.68. The rise in crude prices is attributed to geopolitical tensions, particularly Iran's rejection of a seven-day truce proposal related to the Strait of Hormuz, a vital shipping route for global oil supplies.

In the previous week, several depots in major cities such as Lagos, Warri, Port Harcourt, and Calabar had reduced their petrol and diesel prices between September 21 and 25. This was largely due to a temporary dip in Brent crude prices, which had fallen below $100 amid hopes for diplomatic progress between the United States and Iran. For instance, the average price of Premium Motor Spirit (PMS) in Lagos saw a reduction of N23.50 per litre, with Sahara leading the cuts by lowering its price from N1,351 to N1,325 per litre.

The diesel market experienced even steeper reductions, with Eterna reducing its Automotive Gas Oil (AGO) price by N100, bringing it down to N1,850 per litre. Other depots also followed suit, contributing to a decline in the average Lagos AGO price from approximately N1,860 to N1,824.36 per litre.

However, with the recent spike in crude prices, there is growing uncertainty regarding future pricing at the depots. Some depots in Port Harcourt and Warri were selling petrol below the Dangote Refinery's reference price of N1,325 per litre, while Lagos depots were quoting AGO below the refinery-linked level of N1,850. This situation may soon change as depot owners could be pressured to adjust their prices upwards in response to the rising costs of crude oil.

In a related development, the Dangote Petroleum Refinery has recently opened its petrol sales to all licensed marketers, moving away from its previous consortium marketing arrangement. This strategic shift is expected to enhance competition within Nigeria's downstream petroleum sector, allowing qualified marketers to purchase products directly from the refinery's loading gantry.

As the market adjusts to these changes, consumers and businesses will be closely monitoring how the fluctuations in crude oil prices will affect their fuel expenses in the coming weeks.