By Feyisola Adeyeha
Dangote Petroleum Refinery & Petrochemicals has reassured Nigerians of its commitment to serving as a stabilizing force amid recent shocks in the international oil market.
The refinery is working tirelessly to ensure Nigeria is insulated from supply shocks, prioritizing domestic market supply.
A statement by the Head Media, Relations Branding and Comms. Mr Esan Sunday of Dangote Petroleum Refinery and Petrochemicals, says the Refinery remains committed to transparency, operational excellence, and the long-term objective of securing sustainable energy security and stability for Nigeria at an affordable cost.
According to the state, the conflict in the Middle East has led to refinery shutdowns and production cuts globally, causing a scarcity of petroleum products. China’s export ban on gasoline and diesel has exacerbated the situation. In response, Dangote Refinery adjusted its ex-depot price of Premium Motor Spirit by N100 per litre, absorbing 20% of the cost escalation to cushion the domestic refining.
The conflict had also driven global crude and freight prices sharply higher, with benchmark Brent prices rising by about 26% within a short period to above $84.0 per barrel. In response, the refinery implemented a measured adjustment of N100 per litre in its ex-depot price of Premium Motor Spirit, representing an increase of about 12%. Notably, the refinery has absorbed 20% of the cost escalation, for now, to cushion the domestic market. This is despite continuing to source crude at prevailing international market prices, whether purchased locally or from foreign suppliers.
It is worth noting that Nigerian crude oil is more expensive than the Brent benchmark price by $3 to $6 per barrel. After adding freight of $3.50 per barrel, crude oil will be landing in our tanks between $88 and $91 per barrel. For context, crude oil was landing our tanks at about $68 per barrel when our ex-depot price was N774/litre.
Furthermore, while the refinery receives about five cargoes a month from NNPC, which it pays for in Naira, these cargoes are priced at international market prices , Premium and fall short of the 13 cargoes which it requires to support sales into Nigeria. As a result, the refinery ends up procuring foreign exchange at open market rates to pay for crude cargoes purchased from local and international traders.
The statement says the high crude cost is compounded by the fact that Nigeria’s upstream producers have failed to supply crude oil to the refinery as required under the Petroleum Industry Act (PIA), forcing it to source a substantial portion through international traders who charge an additional premium.
As a private enterprise operating in a deregulated environment, Dangote Petroleum Refinery has remained responsive and has made significant sacrifices by aligning pricing with market realities to ensure sustainability, particularly as it sources all its crude at prevailing international market prices, whether locally or from foreign suppliers. Selling below cost would undermine its ability to procure crude, sustain production, and guarantee uninterrupted supply to Nigerians.
Despite these pressures, local refining at this scale continues to reduce exposure to international supply disruptions, moderate foreign exchange demand, and protect the country from severe shortages during periods of global instability.
The refinery is also accelerating deployment of Compressed Natural Gas-powered trucks to cushion the impact of global shocks, enhance nationwide distribution efficiency, reduce logistics costs, and improve delivery timelines across the downstream sector. The rollout is scheduled to commence this month.
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