Fears on new Fuel Price hike grows amidst Israel-Palestine Conflict

The Israel-Palestine conflict could have a resounding effect on Nigeria’s economy and irrevocably cause another fuel price hike.

Motorists and residents in parts of Abuja were thrown into a state of panic on Monday as several filling stations in the Federal Capital Territory (FCT) did not dispense Premium Motor Spirit (PMS), also known as petrol.

This sudden scarcity has raised concerns about the possibility of a fresh fuel shortage in Nigeria’s capital city.

Reports from the ground indicated that multiple filling stations across the city had run out of fuel, leaving motorists in a state of uncertainty.

Long queues formed at some filling stations on the Kubwa expressway that still had the product in stock, as anxious drivers rushed to secure their fuel supply.

The panic buying was exacerbated by speculations of an imminent hike in the fuel pump price. Worried motorists feared that the unavailability of fuel could be a prelude to another price increase, despite recent assurances to the contrary.

Just two days ago, the Nigerian National Petroleum Corporation Limited (NNPCL) issued a statement vehemently denying any plans to increase fuel prices.

In the statement posted on its official handle, NNPCL said,

“Dear esteemed customers, we at NNPC Retail value your patronage and we do not have the intention to increase our PMS pump prices as widely speculated.”

The latest concerns about a potential price hike were triggered by the ongoing armed conflict between Israel and Palestine in Gaza.

Reports on Monday, October 9, suggested that oil prices had surged in the international market due to fears that the situation in the Middle East could disrupt oil production.

According to the BBC, the international benchmark, Brent Crude, saw a $2.25 per barrel increase, reaching $86.83.

Additionally, the United States benchmark, West Texas Intermediate crude, rose by $2.50 per barrel to $85.30 on Monday morning.

The conflict in Gaza has raised fears of a wider disruption in the Middle East, leading to a more than 3 percent increase in oil prices.

Reuters reported that Brent crude surged by $2.70, or 3.2 percent, to $87.28 a barrel by 11:43 GMT, while US West Texas Intermediate crude rose by $2.78 or 3.4 percent, to $85.57 a barrel.

The situation in Gaza is shaping up to have a profound impact on the global economy, much like Russia’s invasion of Ukraine did earlier in 2022.

Following Russia’s invasion of Ukraine in February 2022, oil prices skyrocketed, exceeding $120 a barrel in June 2023.

Despite being one of the world’s leading oil-producing countries, Nigeria relies heavily on the importation of refined petroleum products, leaving it vulnerable to fluctuations in international oil prices.

Katch Ononuju, an international affairs analyst and Director General at the Heritage Centre in Abuja, commented on the situation, saying,

“The spike in oil prices in the international market, as a result of the Israeli-Palestinian crisis, was inevitable.

“The main reason for the attack is to involve the US in discussions between Saudi Arabia and Israel, with the intention of bringing about peace. Hamas seems to have been strategically successful in this regard.”