Dangote Petroleum Refinery & Petrochemicals has reassured Nigerians of steady fuel availability, pledging to stabilise the country’s energy supply despite growing turbulence in the global oil market.
The refinery stated that escalating geopolitical tensions in the Middle East have disrupted global refining operations, forcing several refineries to shut down and significantly reducing worldwide petroleum product output.
According to the company, the situation has triggered a tightening supply of refined petroleum products globally, a development further compounded by China’s recent decision to suspend the export of gasoline and diesel.
Dangote Refinery emphasised that it would prioritise Nigeria’s domestic market to cushion the country from the ripple effects of the global supply disruptions.
The company explained that the ongoing Middle East conflict has driven up both crude oil and freight costs, with benchmark Brent crude surging by about 26 per cent within a short period to above $84 per barrel.
In response to the rising costs, the refinery announced a ₦100 per litre increase in its ex-depot price of Premium Motor Spirit (PMS), representing an adjustment of roughly 12 per cent.
Despite the price change, the refinery noted that it has absorbed nearly 20 per cent of the cost increase in order to lessen the burden on the local market.
The company further disclosed that it purchases crude oil at prevailing international market rates, regardless of whether the supply comes from local producers or foreign traders.
It explained that Nigerian crude currently trades between $3 and $6 per barrel above the Brent benchmark, while freight charges add approximately $3.50 per barrel, pushing the landed cost of crude in its storage tanks to between $88 and $91 per barrel.
The refinery pointed out that crude previously landed at about $68 per barrel when its ex-depot fuel price was ₦774 per litre.
Dangote Refinery also revealed that it receives roughly five crude cargoes monthly from the Nigerian National Petroleum Company Limited (NNPC), which are paid for in naira. However, the refinery requires about 13 cargoes each month to sustain optimal production levels.
Consequently, the company said it has had to source additional crude supplies from international traders, necessitating foreign exchange transactions at open market rates.
The refinery also lamented that local upstream producers have not consistently met crude supply obligations under the Petroleum Industry Act, forcing it to depend heavily on foreign traders at premium costs.
Dangote Refinery warned that selling petroleum products below cost would jeopardise its ability to procure crude, sustain production and maintain uninterrupted fuel supply across the country.
Nonetheless, the company stressed that the expansion of domestic refining capacity is helping Nigeria reduce exposure to global supply disruptions, ease pressure on foreign exchange demand and guard against severe fuel shortages.
As part of its logistics strategy, the refinery disclosed that it is accelerating the rollout of Compressed Natural Gas-powered trucks to enhance nationwide fuel distribution, cut transportation costs and improve delivery efficiency.
According to the company, deployment of the CNG-powered trucks will commence later this month.
Dangote Refinery reiterated its commitment to transparency, operational efficiency and ensuring long-term energy security for Nigeria.
