The Dangote Petroleum Refinery & Petrochemicals has reassured Nigerians of its commitment to stabilising domestic fuel supply as geopolitical tensions continue to disrupt global petroleum markets.
According to the refinery, the ongoing conflict in the Middle East has triggered shutdowns and production cuts at several refineries worldwide, tightening the availability of refined petroleum products. The situation has been compounded by export restrictions from China on gasoline and diesel, further straining global supply chains.
Against this backdrop, the refinery says it will prioritise domestic supply in order to shield the Nigerian market from potential shortages and price shocks—an outcome it describes as a key benefit of expanding local refining capacity.
Recent volatility in the international oil market has already pushed benchmark crude prices sharply upward. Brent Crude Oil prices have risen by about 26 percent within a short period, climbing to more than $84 per barrel. Rising freight costs have also added pressure to the global petroleum supply chain.
In response to these developments, the refinery announced a measured adjustment of N100 per litre to its ex-depot price of Premium Motor Spirit (PMS), representing roughly a 12 percent increase. However, the company noted that it has absorbed approximately 20 percent of the cost escalation to cushion the impact on the domestic market.
The refinery explained that it continues to purchase crude oil at prevailing international market prices, regardless of whether the cargoes are sourced locally or from foreign suppliers.
“Nigerian crude currently trades at a premium of between $3 and $6 per barrel above the Brent benchmark,” the company said. “When freight costs of about $3.50 per barrel are added, crude effectively lands at our tanks at between $88 and $91 per barrel.”
For context, the refinery noted that when its ex-depot price stood at N774 per litre, crude deliveries were arriving at roughly $68 per barrel.
While the refinery receives about five cargoes of crude oil monthly from the Nigerian National Petroleum Company Limited (NNPC)—which are paid for in naira—this volume remains significantly below the 13 cargoes required each month to sustain current domestic supply levels.
As a result, the refinery said it is compelled to source additional crude oil from international traders, requiring foreign exchange purchases at open market rates and often attracting additional premiums.
The company also noted that upstream producers in Nigeria have not consistently supplied crude oil to the refinery in line with provisions of the Petroleum Industry Act, increasing its reliance on international crude trading markets.
Operating in Nigeria’s deregulated downstream environment, the refinery emphasised that its pricing decisions reflect the realities of global oil markets. Selling fuel below cost, it said, would undermine its ability to secure crude supplies, maintain production, and guarantee uninterrupted product availability.
Despite these pressures, the company maintains that large-scale domestic refining provides a strategic buffer for Nigeria by reducing exposure to global supply disruptions, moderating demand for foreign exchange, and preventing severe product shortages during periods of international instability.
In addition, the refinery announced plans to begin rolling out Compressed Natural Gas (CNG)-powered trucks this month as part of efforts to strengthen nationwide fuel distribution. The initiative is expected to lower logistics costs, improve delivery timelines, and reduce the environmental footprint of downstream transportation.
The refinery reaffirmed its commitment to operational transparency, efficiency, and the long-term goal of strengthening Nigeria’s energy security while maintaining affordable and sustainable fuel supply for the domestic market.
