Dangote Petroleum Refinery & Petrochemicals has clarified that the crude oil used in its operations—whether sourced locally or internationally—is paid for in dollars or the naira equivalent, explaining why fuel prices are influenced by global market conditions.
In a statement issued on Thursday, the refinery noted that Nigerian crude oil, particularly Bonny Light, currently costs more than the global Brent benchmark. While Brent crude was trading at about $85 per barrel, Nigerian crude reportedly sells at a premium of between $3 and $6 above that price.
The company explained that after adding freight costs of around $3.50 per barrel, crude oil delivered to its facility costs between $88 and $91 per barrel. For comparison, it said crude was landing at its tanks at about $68 per barrel when the refinery’s ex-depot petrol price stood at ₦774 per litre.
The refinery also revealed that it receives roughly five cargoes of crude oil monthly from the Nigerian National Petroleum Company Limited, which are paid for in naira. However, these supplies are priced at international market rates plus a premium and fall short of the 13 cargoes required monthly to meet domestic demand.
Because of the shortfall, the refinery said it must source additional crude oil from both local and international traders using foreign exchange obtained at open market rates.
According to the statement, the situation is worsened by the failure of some Nigerian upstream producers to supply crude to the refinery as required under the Petroleum Industry Act. This has forced the company to rely heavily on international traders, who charge extra premiums.
The refinery also pointed to the ongoing tensions in the Middle East as another factor affecting costs. It said the conflict has disrupted operations at some global refineries and reduced overall production, leading to a scarcity of petroleum products worldwide.
As a result, crude oil prices and shipping costs have risen sharply. Brent crude prices have reportedly climbed by about 26 percent in a short period, exceeding $84 per barrel. The refinery also noted that China has halted the export of petrol and diesel, further tightening global supply.
Despite these pressures, the company said it remains committed to prioritising supply to the Nigerian market. It explained that this commitment informed its recent decision to increase its ex-depot price of Premium Motor Spirit (petrol) by ₦100 per litre—from ₦774 to ₦874—representing about a 12 percent rise.
The refinery stated that it had absorbed about 20 percent of the rising costs in order to reduce the impact on consumers.
According to the company, domestic refining helps shield Nigeria from global supply disruptions, lowers foreign exchange demand and reduces the risk of severe fuel shortages during periods of international instability.
The refinery added that selling petrol below production cost would make it difficult to procure crude oil and sustain operations, which could eventually disrupt supply across the country.
It also reassured Nigerians that it remains committed to maintaining stability in the fuel market while ensuring transparency and operational efficiency.
As part of efforts to improve distribution and reduce logistics costs, the refinery said it is accelerating the deployment of trucks powered by compressed natural gas to deliver products nationwide.
Following the recent price adjustment, petrol is now selling for more than ₦900 per litre at filling stations in Lagos and several other cities.
