Iran war : Nigeria rakes in N5.13tn oil revenue amid soaring fuel prices

Nigeria recorded an estimated N5.13 trillion surge in oil revenue within two months as global crude prices spiked sharply following tensions arising from the United States–Iran conflict, significantly exceeding projections in the Federal Government’s 2026 budget.

The crisis, which began on February 28 when oil prices were below $70 per barrel, has since driven prices upward, at one point crossing $120. As of Friday, Brent crude stood at $110 per barrel, while Nigeria’s Bonny Light traded at $134 as of Thursday.

The 2026 budget was based on a daily production target of 1.8 million barrels, a benchmark price of $64.85 per barrel, and an exchange rate of N1,400 to the dollar. At these assumptions, expected daily oil revenue was put at $116.73m, equivalent to about N163.42bn.

However, actual earnings for March and April outperformed this benchmark, largely due to the sustained rally in global oil prices.

Data from the Nigerian Upstream Petroleum Regulatory Commission showed that in March, oil output averaged 1.55 million barrels per day. The Central Bank of Nigeria reported an average crude price of $95.03 per barrel, with the exchange rate averaging N1,370 to the dollar.

With these figures, daily revenue rose to approximately $147.30m, translating to about N201.80bn. This represents a daily increase of N38.38bn above the benchmark, bringing the total windfall for March to about N1.19tn over 31 days.

Although production fell short of the budget target by roughly 250,000 barrels per day, higher crude prices ensured earnings remained above expectations.

In April, the gains became more pronounced as both production and prices increased. Output was projected at an average of 1.7 million barrels per day, while crude prices surged to $127.05 per barrel. The exchange rate averaged N1,365 to the dollar.

This pushed daily revenue to about $216.0m, equivalent to N294.84bn. Compared to the benchmark, this resulted in a daily excess of N131.42bn, bringing April’s total windfall to approximately N3.94tn.

Combined, the excess earnings for the two months amounted to N5.13tn, with March contributing N1.19tn and April accounting for N3.94tn.

Analysis shows that the sharp rise in crude prices, rather than increased production, was the primary driver of the revenue boost. Even in March, when output lagged behind projections, stronger prices ensured higher earnings.

The development offers short-term fiscal relief but also underscores Nigeria’s continued exposure to fluctuations in the global oil market, as revenue performance remains largely tied to external price movements.

Further analysis indicates that without the price surge, earnings would have been significantly lower. If March crude had sold at the benchmark price of $64.85 per barrel, daily revenue would have been about $100.52m, translating to N137.71bn, or roughly N4.27tn for the month.

Similarly, in April, at the same benchmark price and a production level of 1.7 million barrels per day, daily revenue would have stood at $110.25m, equivalent to N150.50bn, amounting to about N4.52tn.

Despite higher government revenue, Nigerians are facing increased hardship as fuel prices climb alongside global crude rates.

The Nigerian National Petroleum Company Limited recently raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, according to Oilprice.com.

“Nigeria reaps the benefits of the Iran war. Nigeria’s national oil company NNPC has raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, hiking its flagship grade Bonny Light by a whopping $6.13 per barrel compared to April, while Forcados is up by $7.01 per barrel,” the report stated.

Petrol prices reacted swiftly, with the Dangote Petroleum Refinery increasing its gantry price to N1,275 per litre from N1,200. Filling stations also adjusted pump prices, rising from around N1,250 to between N1,350 and N1,400, depending on location.

Calls for relief
The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, criticised the lack of government intervention despite increased oil earnings.

He said, “The government is not making any statements about the rising petrol prices, so it’s worrisome. At least, the government could come up with some measures. We are making some gains now on the price of crude oil. The government can give some back to reduce the cost of transportation so that food will not be expensive, along with a few other things. That’s what we have advised.”

He warned that petrol prices could exceed N1,500 per litre if tensions in the Middle East persist.

“If you go back to our predictions, I stated it there because Mr Trump is not very clear as to what he wants, in my opinion; if it is to decimate the Iranian nuclear facility or if it is to take over the crude oil as they are taking over Venezuela’s. I don’t think we know what he wants exactly. So we are not sure we are seeing the end of that crisis,” he said.

Energy experts also urged targeted support for vulnerable Nigerians. A former president of the Nigerian Association for Energy Economics, Professor Adeola Adenikinju, described the situation as a “two-edged sword.”

“This is the time that Nigeria should say, ‘Look, we are sending some cash to those poor people who are vulnerable,” he said.

He added that the absence of reliable data on vulnerable citizens limits the implementation of effective relief measures.
“If we have the data of all the poor people, this is the time that Nigeria should send some cash to those who are vulnerable, but we don’t have the data,” he added.

According to him, recent increases in civil servant allowances may provide only limited relief, as many Nigerians in the private and informal sectors are excluded.

Refiners seek pricing review
Local refiners have called on the Federal Government to reconsider the use of international benchmarks for pricing crude supplied to domestic refineries.
The spokesperson for the Crude Oil Refiners Association of Nigeria, Eche Idoko, said the current approach inflates costs and weakens local refining.

“If you are using Brent to benchmark our pricing, the factors that are affecting the Brent pricing will still affect the price at which you are landing crude here. What we have always insisted on is that those elements in Brent that do not apply to the trade between the local refinery and the oil producers should be discounted. And like that, you get the actual cost of crude for local refineries,” he said.
Economist Bismarck Rewane also suggested a pricing arrangement that would stabilise domestic fuel costs.

“One of the options that can be explored is that the Federal Government of Nigeria agrees to sell crude at a particular price to the Dangote refinery with the assurance that the price of refined products does not increase,” he advised.

Overall, the N5.13tn windfall highlights the impact of the US–Iran conflict on global oil prices and Nigeria’s revenue. While it offers a temporary fiscal boost, it also reinforces the country’s dependence on volatile international markets and the accompanying burden of rising fuel costs on citizens.