By Oke Peter
Nigeria’s Dangote Petroleum Refinery & Petrochemicals has reassured Nigerians of its commitment to stabilising the country’s energy supply despite growing disruptions in the global oil market.
In a statement, the refinery said recent geopolitical tensions in the Middle East have forced the shutdown of some refineries and reduced global refining output, contributing to a scarcity of petroleum products. The situation has been further complicated by export restrictions on gasoline and diesel by China, tightening global supply.
According to the refinery, these developments have driven crude oil and freight prices significantly higher, with benchmark Brent crude rising by about 26 percent within a short period to above $84 per barrel.
In response to the rising costs, the refinery implemented a ₦100 per litre adjustment in its ex-depot price of Premium Motor Spirit (PMS), representing about a 12 percent increase. However, the company said it has absorbed about 20 percent of the cost escalation to cushion the impact on the domestic market.
The refinery noted that it continues to purchase crude oil at prevailing international market prices, whether sourced locally or from foreign suppliers. It added that Nigerian crude oil typically sells at a premium of $3 to $6 above the Brent benchmark price. When freight costs of about $3.50 per barrel are included, the crude oil landing cost ranges between $88 and $91 per barrel, compared to about $68 per barrel when the refinery’s ex-depot price stood at ₦774 per litre.
The company also disclosed that it receives around five crude cargoes monthly from the Nigerian National Petroleum Company Limited, paid for in naira but priced at international market rates plus a premium. However, this supply falls short of the 13 cargoes required each month to meet domestic demand.
As a result, the refinery said it is forced to source additional crude from international traders using foreign exchange obtained at open market rates. It also pointed out that some upstream producers in Nigeria have not supplied crude to the refinery as required under the Petroleum Industry Act, further increasing reliance on external suppliers who charge additional premiums.
Despite these challenges, the refinery emphasised that local refining at scale reduces Nigeria’s exposure to global supply shocks, lowers pressure on foreign exchange demand, and helps prevent severe product shortages during periods of international instability.
As part of its operational strategy, the refinery announced plans to begin deploying Compressed Natural Gas (CNG)-powered trucks this month to improve nationwide distribution, lower logistics costs and enhance delivery efficiency across the downstream sector.
The company reiterated its commitment to transparency, operational excellence and its long-term goal of strengthening Nigeria’s energy security while ensuring sustainable supply at affordable prices.
