Dangote Refinery Moves to Cushion Nigerians from Global Oil Market Shocks

*Says this is one of the benefits of local refining

The Dangote Petroleum Refinery and Petrochemicals has reassured Nigerians of its commitment to stabilising the domestic petroleum market following recent disruptions in the global oil industry triggered by tensions in the Middle East.
In a statement on Thursday, the refinery said the ongoing conflict in the region has forced several refineries worldwide to shut down or reduce production, creating a tightening supply of refined petroleum products. The situation has been worsened by China’s ban on the export of gasoline and diesel, further squeezing global supply.
According to the refinery, these developments have driven up crude oil and freight prices, with benchmark Brent crude rising by about 26 per cent within a short period to over $84 per barrel.
To manage the rising costs while ensuring steady supply, the refinery announced a N100 per litre increase in its ex-depot price of Premium Motor Spirit (PMS), representing about a 12 per cent adjustment. It added that the company has absorbed about 20 per cent of the cost increase in order to cushion the impact on consumers.
The company explained that despite being located in Nigeria, it continues to purchase crude oil at international market prices. Nigerian crude currently sells at a premium of between $3 and $6 above the Brent benchmark, and with freight costs of about $3.50 per barrel, crude delivered to the refinery now costs between $88 and $91 per barrel.
For comparison, the refinery said crude landed at about $68 per barrel when its ex-depot petrol price stood at N774 per litre.
The statement further revealed that the refinery receives about five cargoes of crude monthly from the Nigerian National Petroleum Company (NNPC), which it pays for in naira but the cargoes are priced at international market prices + premium. However, these supplies fall short of the 13 cargoes required monthly to meet domestic demand.
As a result, the refinery said it is forced to purchase additional crude from local and international traders using foreign exchange sourced from the open market, often at additional premiums.
The refinery also noted that domestic upstream producers have not supplied crude as required under the Petroleum Industry Act (PIA), increasing its reliance on international traders.
Dangote Refinery said as a private enterprise operating in a deregulated market, it must align its pricing with market realities to sustain operations.
“Selling below cost would undermine our ability to procure crude, sustain production and guarantee uninterrupted supply to Nigerians,” the statement said.
Despite the challenges, the refinery said large-scale domestic refining continues to shield Nigeria from severe supply disruptions and helps moderate foreign exchange demand during periods of global instability.
In addition, the company disclosed plans to begin rolling out Compressed Natural Gas (CNG)-powered trucks this month to improve nationwide fuel distribution, reduce logistics costs and enhance delivery efficiency across the downstream sector.
Dangote Refinery reiterated its commitment to transparency, operational excellence and the long-term goal of ensuring sustainable energy security and price stability for Nigeria.