The price of Premium Motor Spirit (PMS), popularly known as petrol, could fall to around N900 per litre if the proposed peace agreement between the United States and Iran is successfully implemented and global crude oil prices continue to decline.
The expectation follows fresh developments in the Middle East, where efforts to end months of hostilities have pushed international oil prices downward.
Crude oil prices, which climbed sharply during the conflict, have dropped significantly in recent days as investors react positively to reports of a ceasefire framework and plans to reopen the Strait of Hormuz, one of the world’s busiest oil shipping routes.
Industry operators believe the development could eventually reflect in domestic fuel prices, especially as crude oil remains the major raw material for refined petroleum products.
Market watchers recalled that the prolonged crisis in the Middle East forced crude prices above the $100 per barrel mark, with some periods seeing prices rise beyond $120. The increase had a direct impact on fuel costs across several countries, including Nigeria.
During the period, petrol prices in Nigeria surged from about N830 per litre to around N1,300 per litre. Diesel and aviation fuel also recorded major increases, putting pressure on businesses and transport operators.
There are now growing expectations that local refiners, including the Dangote Petroleum Refinery, may review their prices if the downward movement in crude oil is sustained.
The refinery had previously reduced its petrol loading price from N1,275 per litre to N1,250 per litre after crude prices softened. Diesel prices were also adjusted downward during the same period.
A source familiar with operations at the refinery said another price cut is possible if the market remains stable. However, the source explained that a large volume of crude purchased at earlier, higher prices is still being processed, which could slow the pace of any immediate reduction.
According to the source, petrol selling at N900 per litre is achievable if global oil prices continue to decline and the market fully adjusts to the new realities.
Fuel marketers have also expressed optimism over the outlook.
The Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) said petrol prices could fall below N1,000 per litre once the Strait of Hormuz is fully reopened and crude oil returns to pre-conflict levels.
The association noted that Nigerians paid around N800 per litre before the crisis escalated and believes the market could gradually move back toward that range if peace is maintained.
The optimism comes after United States President Donald Trump announced that a peace arrangement with Iran was underway, with both countries expected to reopen the Strait of Hormuz as part of the agreement.
The planned reopening is expected to restore smoother global oil supply and reduce pressure on international energy markets.
Meanwhile, checks across the downstream sector indicate that some fuel marketers have already started adjusting their ex-depot prices below the current benchmark, signalling the possibility of another round of competition in the industry.
