By Editor
Dangote Petroleum Refinery & Petrochemicals has reaffirmed its commitment to safeguarding Nigeria’s energy stability amid escalating volatility in the global oil market triggered by geopolitical tensions in the Middle East.
The ongoing conflict has led to refinery shutdowns and production cuts across key regions, tightening global fuel supply. China’s suspension of gasoline and diesel exports has further strained the international market, deepening product scarcity.
In response, the Dangote Refinery said it is prioritising domestic supply to shield Nigeria from external supply shocks — underscoring one of the core advantages of large-scale local refining.
Global crude and freight costs have surged sharply, with Brent crude rising by about 26 per cent within a short period to above $84 per barrel. Consequently, the refinery implemented a measured N100 per litre adjustment in its ex-depot price of Premium Motor Spirit (PMS), representing an increase of approximately 12 per cent.
Despite the adjustment, the refinery disclosed that it has absorbed about 20 per cent of the cost escalation to cushion the domestic market. This comes even as it continues to source crude at prevailing international market rates, whether procured locally or from foreign suppliers.
Nigerian crude currently trades at a premium of $3 to $6 per barrel above Brent. With freight costs averaging $3.50 per barrel, crude is now landing at the refinery at between $88 and $91 per barrel — compared to about $68 per barrel when its ex-depot PMS price stood at N774 per litre.
The refinery further noted that while it receives roughly five crude cargoes monthly from Nigerian National Petroleum Company Limited, paid for in naira, the volume falls significantly short of the 13 cargoes required monthly to meet domestic demand. Moreover, the naira-denominated cargoes are still priced at international market rates plus a premium.
As a result, the refinery must source additional crude from local and international traders, necessitating foreign exchange procurement at open market rates and adding to operational costs.
The situation is compounded by what the refinery describes as insufficient crude supply from upstream producers as stipulated under the Petroleum Industry Act (PIA), forcing increased reliance on international traders who charge additional premiums.
Operating within a deregulated environment, Dangote Refinery emphasised that pricing must reflect market realities to ensure operational sustainability. Selling below cost, it warned, would jeopardise its ability to secure crude feedstock, sustain output and guarantee uninterrupted supply to the domestic market.
Despite prevailing pressures, the refinery maintained that local refining at scale significantly reduces Nigeria’s exposure to global supply disruptions, moderates foreign exchange demand and protects the country from severe product shortages during periods of international instability.
In addition, the refinery is accelerating the rollout of Compressed Natural Gas (CNG)-powered trucks to strengthen nationwide distribution efficiency, reduce logistics costs and improve delivery timelines across the downstream value chain. Deployment is expected to commence this month.
The company reiterated its commitment to transparency, operational excellence and the long-term goal of delivering sustainable energy security and price stability for Nigeria.
