- Dangote Petroleum Refinery says it is prioritising domestic fuel supply to shield Nigeria from global petroleum shortages triggered by Middle East tensions.
- The refinery increased its petrol ex-depot price by about ₦100 per litre but said it absorbed part of the cost surge to cushion the local market.
Dangote Petroleum Refinery has reaffirmed its commitment to stabilising Nigeria’s fuel supply despite disruptions in global oil markets.
The refinery said the conflict in the Middle East has triggered shutdowns at several refineries worldwide. These disruptions have reduced output and tightened global petroleum product supply. At the same time, China has banned exports of gasoline and diesel. Consequently, international markets are experiencing further supply pressure.
However, Dangote Refinery stated that Nigeria remains relatively insulated from the worst impacts. The company said this is because it prioritises domestic fuel supply. According to the refinery, the situation demonstrates the strategic value of large-scale local refining capacity.
The company noted that geopolitical tensions have pushed crude oil and freight costs higher. Benchmark Brent crude prices have risen by about 26 per cent in a short period. Prices have climbed to above $84 per barrel.
In response, the refinery adjusted its ex-depot price for Premium Motor Spirit. The revision added about ₦100 per litre. This represents an increase of roughly 12 per cent.
Despite the adjustment, the company said it absorbed nearly 20 per cent of the cost increase. The move aims to reduce the burden on Nigerian consumers.
According to the refinery, it purchases crude oil at international market prices. This applies whether the supply comes from domestic producers or foreign suppliers.
The company explained that Nigerian crude currently trades at a premium of $3 to $6 above Brent. Freight charges add about $3.50 per barrel. As a result, crude arrives at the refinery at between $88 and $91 per barrel.
The refinery noted that when its ex-depot price stood at ₦774 per litre, crude landed at around $68 per barrel. Therefore, the recent rise in input costs has significantly affected refining economics.
Dangote Refinery also disclosed that it receives about five crude cargoes monthly from the Nigerian National Petroleum Company Limited under the naira-for-crude arrangement. However, the facility requires about 13 cargoes each month to fully meet domestic demand.
In addition, the cargoes supplied by NNPC are priced at international market rates with an added premium. Consequently, the refinery must source foreign exchange from the open market to purchase additional crude from local and international suppliers.
The company also expressed concern about supply gaps from some upstream producers. According to the refinery, certain producers have not supplied crude as required under the Petroleum Industry Act (PIA).
Because of these shortages, the refinery has relied on international traders for crude purchases. These traders typically charge additional premiums.
Despite the challenges, Dangote Refinery reaffirmed its commitment to Nigeria’s energy security. The company said it will continue prioritising domestic fuel availability during a period of global energy volatility.