The benchmark had gained $0.83, to trade at $69.71 as of 2:44 pm on Wednesday, Nigerian time, according to data from Oilprice.com.
A rise in oil prices in the international market would result in increased importation costs for petroleum products.
The Nigerian National Petroleum Corporation had stated that it paid an estimated N100bn in petroleum subsidies monthly.
It later said that it would be withholding N112bn from April Federal Account Allocation Committee payments to cover subsidy on petroleum imports.
Although the NNPC said that the payment of subsidies was not affecting its finances, a continued increase in oil prices on the international market could put a strain on the ability of the NNPC to continuously fulfil its obligations.
The National Operations Coordinator of the Independent Petroleum Marketers Association of Nigeria, Michael Osatuyi, said the subsidy regime was the result of government negligence over the years.
He stated that removing the current subsidies may drive the price close to N300, and distort the whole system because petrol was an utility used around the country, in virtually all industries.
He said, “The government is trying to manage the problem. In a deregulated system, the pump price has to go up considering the surge in crude oil prices.
“The NNPC has revealed that it will spend over N100bn on subsidy in April, that is about N2tn a year, a huge amount.
“Nigeria has about 200 trillion cubic feet of gas that can serve us for about 50 years at 60 per cent of the cost of petrol over the same period.”
He added, “The government has met us, IPMAN, and asked to use our fuel stations for the distribution of Compressed Natural Gas and Liquefied Natural Gas.
“Once the government successfully moves to the CNG and LNG standard, the negative effects of the rise in fuel subsidy payments can be mitigated.”
S&P Global Platts quoted a leaked draft document published by Euractiv that said the European Union had reportedly increased its 2030 target for the share of renewables in primary energy from 32 per cent to 38 to 40 per cent.
As European countries remain the combined largest importers of Nigerian crude, this could further hurt the country’s finances as crude oil remains Nigeria’s largest source of foreign exchange.