Nigeria has emerged as one of the hardest-hit countries in the global fuel price rally triggered by the ongoing tensions involving the United States, Iran, and Israel, despite being one of Africa's largest oil producers and home to the continent's biggest refinery.

Data from Investorsight shows that gasoline prices in Nigeria have risen by 39.5%, placing it second globally just behind Vietnam, highlighting deep structural challenges in the country's downstream oil sector.

Oil remains the world's most critical energy resource, powering roughly 70% of global demand and underpinning industries from transportation to agriculture.

As geopolitical tensions disrupt supply chains and threaten key shipping routes, the resulting price shocks are being felt unevenly across countries, with import-dependent economies and those with fragile refining systems bearing the brunt.

At the refinery level, Dangote Refinery increased ex-depot prices from about ₦774 to ₦874 per litre in early March, a roughly 13% jump, with retail prices climbing to ₦1,075–₦1,175 per litre in some areas. Meanwhile, NNPC Limited recorded steeper increases, with pump prices rising from ₦900–₦1,000 to ₦1,200–₦1,400 per litre across major cities, reflecting a 30–40% surge.

Overall, Nigeria's average petrol price has increased by nearly 40%, reflecting how quickly global disruptions are transmitted into the domestic market. With fuel pricing now deregulated, both refinery and retail prices respond rapidly to shifts in crude oil prices, exchange rates, and supply risks, leaving even an oil-producing nation highly vulnerable to external shocks.

The sharp increase in Nigeria's fuel prices reflects a paradox that has long defined its energy sector. Despite being a major crude oil exporter, the country has historically relied on imported refined petroleum products due to underperforming state-owned refineries.

Even with the operational ramp-up of the Dangote Refinery—Africa's largest—Nigeria is still navigating a transitional phase. The refinery has yet to fully stabilize domestic supply or eliminate dependence on imports, leaving local prices exposed to global market shocks.

Additionally, the full deregulation of Nigeria's downstream sector has linked domestic fuel prices more directly to international crude benchmarks. This means that any geopolitical disruption—such as tensions in the Middle East affecting oil transit routes like the Strait of Hormuz—quickly translates into higher pump prices locally.

Currency pressures have also amplified the impact. The depreciation of the naira increases the cost of importing refined products and crude feedstock, further pushing up retail fuel prices.

In contrast, some developed economies have strategic reserves, diversified energy mixes, or subsidy buffers that help cushion price volatility. Nigeria's high ranking, therefore, highlights not just global pressures, but persistent domestic vulnerabilities in refining, logistics, and foreign exchange stability.