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…Petrol increases to N1,100 per liter
From Adanna Nnamani, Abuja
Crude oil prices have risen above $90 per barrel in the international market as growing tensions in the Middle East raise fears that oil supply could be affected.
Brent crude, the global benchmark used to price Nigeria’s Bonny Light, is now selling at about $93 per barrel, while the United States benchmark, West Texas Intermediate (WTI), is trading at over $91 per barrel. The price of Murban crude also surged to $102.2 per barrel. This is one of the biggest increases seen in recent months.
The rise in prices is linked to the ongoing conflict involving the United States, Israel and Iran, which has raised concerns that oil supply from the Middle East could be disrupted. The region is one of the largest producers of crude oil in the world and supplies a large share of global exports.
Energy experts say the tension has created uncertainty in the global oil market, causing traders to increase prices because they fear there could be a shortage of supply.
Attention has also turned to the Strait of Hormuz, an important shipping route between the Persian Gulf and the Gulf of Oman. About 20 per cent of the world’s oil passes through this narrow waterway every day, so any disruption there could affect global oil supply and push prices even higher.
Reports of security threats around oil facilities in the Middle East have also increased concerns among traders, leading to more activity and speculation in the market.
International investment bank, Barclays, has warned that Brent crude could rise to about $120 per barrel if the conflict continues for several weeks and oil shipments through the Strait of Hormuz are affected. Such a situation could lead to higher inflation and economic uncertainty across the world.
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The increase in crude oil prices has already caused concern in global financial markets, with investors worried that higher energy costs could slow economic growth and push up the prices of goods and services.
Earlier in the year, oil prices were mostly between $70 and $85 per barrel, but tensions in the Middle East have pushed prices higher in recent weeks.
For oil-producing countries like Nigeria, higher crude prices could increase government revenue and bring in more foreign exchange. However, experts warn that higher global oil prices often lead to an increase in the cost of refined products such as petrol and diesel, which can raise transportation costs and worsen inflation.
Already, oil marketers in Lagos, Abuja and other parts of the country are adjusting their prices. As of yesterday, a lot of filling stations had increased the pump price of Premium Motor Spirit (PMS), also known as petrol, to N1100 per litre from N1,000 per litre and even N975, earlier in the week.
Energy analysts say oil prices may continue to rise or fluctuate in the coming weeks as the world closely watches developments in the Middle East and their impact on global oil supply.
Speaking on the situation, Chief Executive Officer of Petroleumprice.ng, Olajide Jeremiah, said: “The Middle East conflict has impacted the domestic market, causing uncertainty and frequent price adjustments. More adjustments are expected in the coming weeks as crude oil continues to rise.”
The President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) also said: “The price of crude oil will continue to rise because the situation in the Middle East has not improved. Further increases in the prices of crude oil and petroleum products should be expected.
“We are entering a phase that requires calmness rather than panic. There is nothing to worry about. Panic buying would worsen the current situation. At PETROAN, we are determined to work with other stakeholders to ensure sustainable product supply.”
