Brent crude is sliding toward $60 a barrel, well below the $75 Nigeria built its 2026 budget on. For now, that means cheaper petrol and diesel as Dangote cuts pump prices. For the government, it means a shrinking cushion to fund the year ahead.
The Good and Bad News About Falling Oil Prices
Brent crude, the international benchmark for oil prices, has been losing ground in recent weeks. Citibank, one of the world's largest financial institutions, now expects it to average about $60 per barrel before the end of 2026, well below the $75 benchmark used in Nigeria's 2026 budget. The effects are already showing up in the downstream market.
Since the end of May, Dangote Petroleum Refinery has cut its ex-depot petrol price several times, most recently reducing the gantry price to ₦1,075 per litre on July 2. Diesel and aviation fuel prices have also fallen. According to the refinery, cheaper crude is replacing the more expensive cargoes it purchased earlier in the year.
That timing matters as refineries do not process crude bought at today's market price. They work through inventories acquired weeks earlier, so movements in international oil prices usually take time to reach filling stations. Dangote said the average landing cost of its crude fell from about $124.80 per barrel in May to $95.25 in June, while Brent crude has traded closer to $71 in recent weeks. If those lower prices persist, refiners have greater scope to reduce fuel prices further.
For many Nigerians, the first benefit is straightforward. Petrol generators become cheaper to run, and businesses that rely on diesel spend less on keeping their operations going. Transport costs may also ease, although that depends on whether transport operators pass lower fuel costs on to passengers.
The story changes once government finances enter the equation. Nigeria's 2026 budget assumes oil will sell for an average of $75 per barrel. A sustained fall towards $60 would reduce oil earnings unless higher production makes up the difference. The eventual impact would depend on several factors, including production volumes, exchange rates and revenue from outside the oil sector, but lower crude prices generally leave less fiscal room for an economy that still depends heavily on oil exports.
The same trend that eases fuel costs for consumers can also squeeze public finances. Lower oil prices are good news for anyone buying petrol or diesel. For the government, they make balancing the books considerably harder.
Sources: Nairametrics, Nigeria's 2026 Budget Faces Pressure as Citi Sees Brent Crude Falling to $60, July 2026; Premium Times, Dangote Refinery Cuts Fuel Prices Again, Signals Further Moderation, July 2026; Blueprint Newspapers, Dangote Refinery Slashes Petrol Price for Fourth Time in a Month, July 2026.
Fabian Omini
Energy Analyst
Fabian Omini is an energy analyst with a keen interest in translating complex energy and finance topics into clear, accessible narratives for everyday Africans.
