Crude oil surged toward the important $100-a-barrel mark on Tuesday, reviving fears of another round of pump-price increases in Nigeria and raising the possibility that Dangote Refinery could soon revise its gantry price to reflect the higher cost of replacing petroleum products.
Brent crude traded at $98.05 a barrel at 10:15 a.m. West Africa Time, up $2.05, or 2.11 percent, on the day. West Texas Intermediate climbed even faster, adding $2.91, or 3.18 percent, to change hands at $94.39.
Both benchmarks have now gained roughly 4 percent over just two trading sessions, a pace that traders and refiners alike are struggling to keep up with.
“The benchmarks are rising, and they need to factor in replacement cost, so they might review their prices very soon,” an industry source said, speaking on condition of anonymity because the matter is commercially sensitive.
The source said the rally was becoming increasingly difficult for suppliers to absorb without passing costs downstream, but cautioned that any decision at the refinery level would not be automatic. Management, the person said, is also weighing how a fresh increase would land on already-stretched consumers.
