Energy crisis grips Nigeria amid US-Israel war in Iran

The war raging in Iran has impacted the energy markets across the world, including Nigeria, where daily lives and businesses are suffering due to a surge in the prices of oil.

The energy crisis dominated Nigerian news media on Saturday. 

What effect is the Iran war having on oil prices in Nigeria?

Since the outbreak of the war in Iran, prices of petrol in Nigeria have surged multiple times.

However, the war is not the source of the problem, but rather is exacerbating pre-existing issues arising from chronic underinvestment and a weak energy transmission infrastructure.

The series of price adjustments represents a cumulative increase of about 47% in six weeks.

The Dangote Refinery in Nigeria — one of the largest in the world — has once again increased the cost of petrol from N1,075 (€0.68) to N1,175 (€0.74) per liter, according to Nigerian news channel Arise News.

The increase in oil prices has prompted depot operators across key supply hubs to halt purchases of fuel.

"The revision reflects the surge in global crude oil prices," Arise reported, citing a market source. Brent crude prices went up from $91 to around $100 per barrel, increasing the costs for refining.

The disruption to the oil market could also prove to boon to Nigeria's own crude oil exports, which briefly peaked at $120 per barrel earlier in the week.

How is Nigerian media reporting on the energy crisis?

Vanguard reported on the impact of the crisis on Nigeria's poorest. Citing experts, it warned of inflationary pressure on basic goods due to the rise in fuel costs, which would hit lower-income individuals the hardest.

It also pointed to the instability of the current hike in oil prices, explaining that a continued conflict could lead to a global recession that could bring down the demand for Nigerian oil.

Rising energy prices are also pushing up transportation costs, both for private car owners as well as users of public transport, as reported by the Nigerian newspaper The Guardian.

Transport operators have warned that the continued hike in prices would lead to further fare increases, which puts pressure on households and potentially leaves them with less money for groceries.

The West African country already has one of the worst power supply wherein nearly 50% of the population does not have access to grid electricity. The Punch newspaper reported on prolonged blackouts witnessed across large parts of the country, pointing to a problem that precedes the war in the Middle East.

It pointed out that despite Nigeria's technical capacity to produce more than 12,000 megawatts of energy, this regularly falls below 4,000 megawatts, far less than the amount needed to cover the needs of the country's 220 million-strong population.

Edited by: Alex Berry, Zac Crellin