…..Explains N100 Petrol Price Increase
Dangote Refinery has promised amid the ongoing conflict in the Middle East, to shield Nigeria from the resulting supply shocks by prioritising the domestic market.
In a statement issued on Thursday, the refinery said the crisis has pushed up global crude oil and freight costs, with the benchmark Brent Crude price surging by about 26 per cent within a short period to over $84 per barrel.
To cushion the impact of rising costs, the refinery announced a measured adjustment of N100 per litre in its ex-depot price of Premium Motor Spirit (PMS), representing an increase of roughly 12 per cent.
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It noted, however, that it had absorbed about 20 per cent of the cost escalation to reduce the burden on the domestic market.
The company explained that it continues to source crude oil at prevailing international market prices, whether purchased locally or from foreign suppliers.
It added that Nigerian crude currently sells at a premium of between $3 and $6 above the Brent benchmark. When combined with freight costs of about $3.50 per barrel, crude delivered to the refinery now lands at between $88 and $91 per barrel.
According to the statement, the situation contrasts sharply with earlier periods when crude landed at about $68 per barrel, at a time the refinery sold petrol at an ex-depot price of N774 per litre.
The refinery further disclosed that it receives roughly five crude cargoes monthly from Nigerian National Petroleum Company Limited, which it pays for in naira. However, the volume falls short of the 13 cargoes required monthly to sustain domestic supply.
As a result, the refinery must procure additional crude from local and international traders using foreign exchange sourced from the open market.
It also noted that the high cost of crude is compounded by the inability of some upstream producers to supply crude as stipulated under the Petroleum Industry Act, forcing the refinery to rely on international traders who charge additional premiums.
Despite these challenges, the company emphasised that large-scale local refining helps reduce Nigeria’s exposure to global supply disruptions, ease pressure on foreign exchange demand and prevent severe fuel shortages during periods of international instability.
As part of efforts to improve distribution efficiency, the refinery also announced plans to deploy Compressed Natural Gas-powered trucks nationwide beginning this month.
The initiative, it said, will help reduce logistics costs, enhance delivery timelines and strengthen supply across the downstream sector.
