Oil Price Nigeria Today

Nigeria is Africa's largest oil producer and a founding member of OPEC. The country's crude — primarily light, sweet Bonny Light and Qua Iboe blends from the Niger Delta — is prized by refiners globally for its low sulphur content and high yield of premium products.

The NNPC (Nigerian National Petroleum Company), rebranded from NNPC Limited following the Petroleum Industry Act 2021, is the state oil entity. It manages upstream joint ventures with international oil companies (Shell, TotalEnergies, ExxonMobil, Chevron) and controls the domestic fuel supply chain.

• Production capacity: Nigeria has the capacity to produce ~2 million bbl/day but actual output has been constrained to ~1.3–1.5 million bbl/day due to pipeline vandalism, oil theft (crude bunkering), and chronic underinvestment in ageing infrastructure.
• Bonny Light crude: Nigeria's flagship export grade. Light, sweet, and sulphur-poor — it commands a small premium to Brent. Primarily exported to Europe, India, and the US.
• Niger Delta: The oil-producing region faces persistent community unrest, environmental damage from decades of spills, and militant activity — all of which have suppressed Nigeria's ability to reach its production potential.
• Dangote Refinery: Opened in 2024 near Lagos with a 650,000 bbl/day capacity — the largest single-train refinery in the world. Designed to end Nigeria's paradox of exporting crude while importing refined petrol. Full ramp-up is ongoing.

Nigeria's foreign exchange earnings are overwhelmingly dependent on crude oil exports — typically around 90% of total FX earnings. This makes the Naira extremely sensitive to Brent price movements. When oil is high, FX reserves accumulate and the Naira is defended. When oil falls, reserves drain and the Naira depreciates under pressure.

The CBN's (Central Bank of Nigeria) 2023 FX unification — which effectively devalued the official rate from ~₦460/USD to ~₦750/USD and beyond — was partly a structural response to years of suppressed reserves from low oil revenues and rampant FX demand outstripping supply. By mid-2024, the Naira had weakened to over ₦1,500/USD at various points, driven by continued FX market dysfunction and the post-subsidy removal economic adjustment.

The practical consequence: even if Brent crude prices are stable in USD terms, a falling Naira means higher NGN oil costs — compounding inflationary pressure on fuel and transported goods across Nigeria.

For decades, Nigeria maintained a petrol subsidy that kept pump prices artificially low — often among the cheapest in Africa. The subsidy cost ballooned to over ₦4 trillion annually by 2022, consuming a significant fraction of the federal budget. In practice, the subsidy disproportionately benefited wealthier car owners and cross-border smuggling to neighbouring countries where Nigerian petrol was resold at a profit.

On 29 May 2023, newly inaugurated President Bola Tinubu announced the immediate end of the subsidy. The pump price surged overnight from approximately ₦185/litre to over ₦568/litre, with further increases through 2023 and 2024 as the Naira depreciated and import costs rose. By early 2025, petrol prices in many parts of Nigeria exceeded ₦1,000/litre.

The Dangote Refinery's domestic production is expected to provide some relief by reducing the FX component of refined fuel imports — but full impact depends on ramp-up pace and pricing agreements with NNPC.