Pump prices of Premium Motor Spirit, also known as petrol, alongside other refined petroleum products such as Automotive Gas Oil and Household Kerosene, may rise soon following an increase in global crude oil prices.

Crude oil, which serves as the primary feedstock for refined petroleum products, crossed the $66 per barrel mark on Wednesday, raising fresh concerns about the cost of fuel in the domestic market.

Brent crude, the global benchmark, traded above $66 per barrel on Wednesday, while other oil grades also recorded price increases, signalling possible upward pressure on the prices of refined products in the coming days.

Industry players attributed the price surge to instability in Iran and Venezuela, as well as actions taken by the United States against Venezuela and its recent threats directed at Iran.

According to the stakeholders, crude oil prices may continue to rise unless political and economic stability is restored in the two major oil-producing nations.

Oil marketers projected that crude oil prices could climb as high as $80 per barrel due to the prevailing uncertainties in the international oil market.

They noted that crude oil remains the main feedstock for producing refined petroleum products, while foreign exchange rates also significantly influence the cost of imported fuel.

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, confirmed these developments while speaking with The PUNCH on Wednesday, warning fuel consumers to prepare for possible price increases.

“It is simple economics, crude oil is the main feedstock for refined petroleum products, so as the price of crude oil grows, the costs of these refined products are bound to rise. We have only one major refiner in Nigeria currently, and no one can certainly say whether the plant will retain its prices amid the spike in crude.

“Imported petrol will, of course, rise, and the same is expected of domestically produced PMS. The instability in Iran and Venezuela is definitely playing out. Even if the US decides to sell the crude produced from Venezuela at a reduced cost, it may not bring down the global crude oil prices.

“So, as fuel consumers, we should brace for hikes in the cost of refined products. It may not be now, but a sustained hike in crude oil prices would definitely lead to a spike in the costs of refined products domestically,” Gillis-Harry stated.

He further warned that ongoing instability in the Middle East could push crude oil prices to $80 per barrel before the end of the month.

Gillis-Harry noted that while higher crude prices could increase foreign exchange earnings for the Federal Government, they would also result in higher pump prices for refined petroleum products.

“There is apprehension that the price of crude doesn’t cross $80/barrel before the end of the month, because with the way things are going, and the seeming daily increases in crude oil price lately, the cost might get to that.

“Of course, the government would make more foreign exchange earnings as a result of this, but this will mean higher prices of refined petroleum products, and the masses would have to bear the brunt. This is the situation in the oil and gas sector right now,” Gillis-Harry explained.

Recent developments in the global oil industry have contributed to pushing crude oil prices above the $60 per barrel level recorded about a month ago.

On Wednesday, The PUNCH reported that global oil prices surged on Tuesday following escalating drone attacks on Russia’s Novorossiysk terminal, which reportedly handles about two per cent of global daily oil supply, according to Oilprice.com.

The report stated that Brent crude rose from $63 per barrel on Monday to trade at about $65.14 on Tuesday evening.

It added that United States West Texas Intermediate crude climbed to $60.75 from $59, reflecting a gain of approximately $2.1 per barrel.

The surge followed reported disruptions at the Caspian Pipeline Consortium infrastructure, a major export route for Kazakhstan’s crude oil operated by Western oil majors, including Chevron and Shell.

The developments raised concerns about a potential supply squeeze in the global oil market.

Reuters also reported that two oil tankers waiting to load crude from some of Kazakhstan’s largest oilfields were hit by drones at the CPC marine terminal near Novorossiysk on Russia’s Black Sea coast.

As crude oil prices remain elevated, data released on Wednesday by the Major Energies Marketers Association of Nigeria showed that the landing cost of imported petrol remains higher than the ex-depot price of N699 per litre offered by the Dangote Petroleum Refinery.

According to MEMAN, the landing cost of imported petrol dropped slightly to N754.96 on Wednesday from N758 recorded the previous week.

The association noted that Dangote Refinery’s gantry price remained N699 per litre, leaving a price difference of about N44.

Oil marketers, however, warned that prices of both domestically refined fuel and imported fuel could increase in the coming days if crude oil prices continue to rise.

They stressed that the Federal Government must intensify efforts to ensure Nigeria’s refineries under the management of the Nigerian National Petroleum Company Limited become fully operational.

“This is why PETROAN has been calling for the actual revamp of NNPC refineries in Port Harcourt, Kaduna, and Warri,” Gillis-Harry stated.

“We need these plants to start working properly, because their operations will go a long way in impacting the oil sector in Nigeria positively.”