Nigerian fuel depot prices have begun climbing across key markets as renewed concerns over Middle East oil supplies pushed Brent crude above $105 per barrel, raising replacement-cost expectations for petroleum products.
As of 11:40 a.m. WAT on Thursday, Brent crude was trading at $105.02 per barrel, up more than 4.81 percent from Wednesday’s close, while West Texas Intermediate (WTI) stood at $92.69, representing an increase of about 5 percent.
The crude rally followed a fresh escalation around the Strait of Hormuz, where increasingly frequent attacks on oil tankers have disrupted shipping activity and heightened concerns over the movement of crude from the Persian Gulf.
Reports citing maritime security data showed that about a dozen tanker attacks were recorded between September 28 and October 2, while Kpler data indicated that tanker traffic through Hormuz had fallen sharply, with flows on Tuesday reaching their lowest level since late July.
The renewed disruption has added a supply-risk premium to crude prices after the market had earlier been weighed down by expectations that the G7's planned release of crude and refined products would ease supply pressures.
For Nigeria's downstream market, the higher international benchmark is already being reflected in selected depot prices as operators reassess the cost of replacing their existing stocks.
In Warri, Parker increased its PMS price from ₦1,305 to ₦1,315 per litre, representing a ₦10 increase.
Optima and Keonamex recorded larger adjustments, with both moving from ₦1,305 to ₦1,330 per litre, a ₦25 increase each.
Port Harcourt also recorded upward movements. TSL and Sigmund, which had reviewed their PMS prices to ₦1,292 per litre on October 7, raised their quotations to ₦1,300 on October 8, adding ₦8 per litre.
In Calabar, Northwest increased its PMS price from ₦1,300 to ₦1,315 per litre, a ₦15 rise within a day.
The sharpest increase among the comparable prices was recorded in Lagos AGO trading, where Ibeto's diesel price rose from ₦1,705 to ₦1,900 per litre, representing a ₦195 jump.
The movements show how rapidly changing international supply expectations can influence Nigeria's wholesale fuel market through replacement costs.
Depot operators are particularly sensitive to the price at which they will replenish their inventories. Selling existing stocks at yesterday's prices becomes less attractive when the cost of replacing those volumes is expected to rise.
The latest crude rally is therefore creating pressure beyond the immediate cost of products already in storage. Marketers and depot operators must also factor in the potential cost of their next purchases when determining selling prices.
The effect, however, is not uniform across the market. Depot prices can differ depending on inventory positions, sourcing arrangements, product availability, financing costs, transportation and local competition.
The increases recorded between October 7 and October 8 nevertheless show a clear upward movement in selected PMS and AGO markets, particularly in Warri, Port Harcourt, Calabar and Lagos.
The pressure could intensify if Brent sustains levels above $105 per barrel and the security situation around Hormuz continues to restrict tanker movement.
For Nigerian fuel traders, the immediate concern is consequently shifting from the price of existing stocks to the cost of replacing them in an increasingly uncertain international market.
Further crude gains, prolonged shipping disruptions and tighter Middle East supply could prompt more depots to review their prices upward as replacement costs continue to rise.