Dangote Petroleum Refinery & Petrochemicals has reaffirmed its commitment to ensuring stability in Nigeria’s energy supply despite recent disruptions in the global oil market.
In a statement, the company explained that the ongoing conflict in the Middle East has forced some refineries to shut down and reduced global production, resulting in a shortage of petroleum products. It also noted that China’s decision to halt the export of gasoline and diesel has further tightened global supply.
The refinery said it would prioritise the Nigerian market in order to protect the country from the effects of these international supply disruptions, describing domestic refining as a key advantage for energy security.
According to the company, the crisis has driven up global crude oil and freight costs, with Brent crude prices rising by about 26 per cent in a short period to more than $84 per barrel. As a result, the refinery said it implemented a “measured adjustment” of N100 per litre in its ex-depot price of Premium Motor Spirit (PMS), representing roughly a 12 per cent increase.
It noted that the refinery has absorbed about 20 per cent of the additional cost to help cushion the impact on the local market, adding that crude oil used for refining is still purchased at international market prices whether sourced locally or abroad.
The company further explained that Nigerian crude is currently sold at a premium of between $3 and $6 above the Brent benchmark. With freight charges estimated at about $3.50 per barrel, crude oil ultimately arrives at the refinery at a cost ranging from $88 to $91 per barrel.
For comparison, the refinery said crude was landing at about $68 per barrel when its ex-depot petrol price stood at N774 per litre.
It added that although it receives around five crude cargoes monthly from the Nigerian National Petroleum Company (NNPC), which are paid for in naira, this volume is far below the 13 cargoes needed to fully meet domestic demand. Consequently, the refinery must source additional crude from international traders using foreign exchange at market rates.
The company also pointed out that limited supply from Nigerian upstream producers, as required under the Petroleum Industry Act (PIA), has worsened the situation, forcing it to rely on international traders who charge additional premiums.
Dangote Refinery stated that as a private business operating within a deregulated market, it has continued to respond to market conditions while making significant efforts to maintain sustainable operations.
The company warned that selling fuel below production cost would make it difficult to purchase crude oil, maintain operations, and ensure consistent supply.
Despite these challenges, the refinery said its large-scale domestic refining capacity helps reduce Nigeria’s exposure to global supply disruptions, eases pressure on foreign exchange, and minimises the risk of fuel shortages during periods of global instability.
It also announced plans to deploy Compressed Natural Gas (CNG)-powered trucks to improve fuel distribution nationwide, reduce logistics costs and enhance delivery efficiency. The rollout of the trucks is expected to begin later this month.
The company reaffirmed its commitment to transparency, operational efficiency and the long-term goal of ensuring reliable and affordable energy supply for Nigeria.
