Nigeria’s Dangote Petroleum Refinery & Petrochemicals has declared its commitment to insulating the country from escalating global petroleum supply disruptions, even as it absorbs significant cost pressures to cushion domestic consumers.
Global crude and freight prices have spiked sharply, with benchmark Brent crude rising by approximately 26% to above $84.0 per barrel. China has banned exports of gasoline and diesel, and several international refineries have halted or reduced output, creating a worldwide scarcity of petroleum products.
In response, the Dangote Refinery implemented a measured price adjustment of N100 per litre on its ex-depot price of Premium Motor Spirit — an increase of roughly 12% — while absorbing 20% of the total cost escalation to protect the domestic market. The refinery notes that Nigerian crude oil commands a premium of $3 to $6 per barrel above the Brent benchmark, and with freight costs of $3.50 per barrel, crude is landing in its tanks at between $88 and $91 per barrel.
The refinery currently receives approximately five cargoes per month from the Nigerian National Petroleum Company (NNPC), paid for in Naira, but these fall well short of the 13 monthly cargoes needed to sustain domestic sales. The shortfall forces the company to procure foreign exchange at open market rates to purchase additional cargoes from local and international traders. The refinery has also pointed to Nigeria’s upstream producers failing to supply crude as required under the Petroleum Industry Act (PIA), compelling it to source a substantial portion through international traders at additional premiums.
Despite these headwinds, the refinery says local production at scale continues to moderate Nigeria’s foreign exchange demand and shield the country from severe shortages during periods of global instability. It is also accelerating a rollout of Compressed Natural Gas-powered trucks this month to reduce logistics costs and enhance nationwide fuel distribution.
Source: Champion News