Hungary, South Korea move to cap fuel prices as global oil surge hits Nigeria

Amid rising global oil prices triggered by the ongoing US and Israel conflict with Iran, governments in South Korea and Hungary are moving to cap gasoline and diesel prices to protect consumers from the sharp increase in fuel costs.

The surge in crude oil prices has been linked to disruptions along key global supply routes, particularly the Strait of Hormuz, a vital shipping channel through which a significant share of the world’s oil supply passes.

On Monday, South Korean President Lee Myung said the government would cap domestic fuel prices for the first time in nearly 30 years to contain the recent spike triggered by tensions in the Middle East, Reuters reported.
Speaking at an emergency meeting on the economic impact of the crisis, Mr Lee said the government would “swiftly introduce and boldly implement” a maximum price system on petroleum products “that have recently seen excessive price increases.”

The current crisis, he noted, “is a significant burden on our economy, which is highly dependent on global trade and energy imports from the Middle East.”

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Mr Lee also said the government would explore alternative energy supply routes beyond those shipped through the Strait of Hormuz.

After the meeting, presidential policy adviser Kim Yong-beom said the industry ministry had been directed to move quickly so the price-capping system could take effect as early as this week.

He added that the maximum price could be reviewed every two weeks, noting that South Korea has sufficient oil reserves to cover about 208 days of consumption.

Similarly, the Hungarian government said it would introduce a price cap on gasoline and diesel at filling stations starting from midnight local time.

Prime Minister Viktor Orbán announced the measure on Monday as global oil prices surged amid escalating tensions involving Iran.

In Nigeria, consumers are already feeling the impact of the supply disruption caused by the conflict.

Within a week, fuel prices have been adjusted twice by major marketers and filling stations in response to fluctuations in Brent crude prices.

The price adjustment became pronounced after the Dangote Refinery increased its gantry price from N774 to N874 per litre last Monday. The price was later reviewed upward on Sunday to N995 per litre. There are speculations that the price has also been reviewed after Brent crude crossed the $100 per barrel mark in the early hours of Monday.

Filling stations across Africa’s most populous nation have also increased pump prices from about N870 per litre to around N960, and later to N1,080 and above.

Although the effects of rising oil prices are not limited to Nigeria, several oil-importing and exporting countries are now scrambling to introduce measures to cushion the impact on their citizens.

It was reported that the Nigerian government, through the Nigerian National Petroleum Company Limited, is making efforts to secure crude oil for the Dangote Petroleum Refinery through third-party international traders in order to sustain the refinery’s operation and cushion the effect on citizens.

READ ALSO: Dangote Refinery to focus on domestic fuel supply security as oil price volatility rages

Mixed implications for Nigeria

The spike in oil prices is largely driven by global supply disruptions and could significantly boost Nigeria’s revenue as a major crude oil exporter.

Higher crude prices may strengthen the country’s foreign exchange reserves and support fiscal consolidation.

With Brent crude trading above $100 per barrel, far higher than Nigeria’s 2026 budget benchmark of $64.85, the federal government could record substantial revenue gains.

However, analysts warn that Nigerians may soon face higher prices for goods and services.

This is because a significant share of petroleum products consumed in the country is still imported.

As a result, rising global oil prices typically translate into higher domestic fuel prices, which in turn push up transportation costs and commodity prices across the economy.