Dangote Refinery Assures Nigerians of Fuel Supply Stability Amid Global Market Turbulence

photo credit: The Punch newspaper

Dangote Petroleum Refinery & Petrochemicals has reiterated its commitment to maintaining stable fuel supply in Nigeria despite growing disruptions in the global oil market.

The refinery said recent geopolitical tensions in the Middle East have affected global refining capacity, leading to the shutdown of some refineries and a decline in petroleum product output across several markets.

According to the company, the situation has contributed to tightening global supply of refined petroleum products. It added that the scarcity has been compounded by China’s decision to suspend exports of gasoline and diesel.

The refinery said it would prioritise the domestic market to help shield Nigeria from the effects of global supply shocks.

It noted that tensions in the Middle East have also driven global crude oil and freight prices significantly higher. Benchmark Brent crude has reportedly risen by about 26 percent in a short period, climbing to above $84 per barrel.

In response to the rising costs, the refinery recently increased its ex-depot price of Premium Motor Spirit (PMS) by ₦100 per litre, representing roughly a 12 percent adjustment.

Despite the increase, the company said it had absorbed nearly 20 percent of the cost escalation to limit the impact on the local market.

The refinery explained that it continues to procure crude oil at prevailing international market prices, whether sourced domestically or from overseas suppliers.

It added that Nigerian crude is currently priced between $3 and $6 per barrel above the Brent benchmark, while freight costs add an estimated $3.50 per barrel. This places the landing price of crude delivered to the refinery between $88 and $91 per barrel.

The company noted that when crude previously landed at around $68 per barrel, its ex-depot petrol price was ₦774 per litre.

Dangote Refinery further disclosed that it receives about five crude cargoes monthly from the Nigerian National Petroleum Company Limited, which are paid for in naira. However, the refinery requires about 13 cargoes each month to operate at full capacity.

As a result, the company said it must procure additional crude from international traders, a process that requires foreign exchange purchases at open market rates.

The refinery also stated that upstream producers in Nigeria have not consistently supplied crude as required under the Petroleum Industry Act, forcing it to source a significant portion of its feedstock from international markets at additional premiums.

According to the company, selling petroleum products below cost would make it difficult to sustain crude procurement, maintain production levels and guarantee uninterrupted supply.

Despite these challenges, the refinery said increased domestic refining capacity is helping Nigeria reduce exposure to global supply disruptions, ease pressure on foreign exchange demand and minimise the risk of fuel shortages.

The company also revealed that it is accelerating the rollout of Compressed Natural Gas (CNG)-powered trucks to strengthen nationwide fuel distribution, reduce logistics costs and improve delivery efficiency.

The deployment of the CNG-powered trucks is expected to begin later this month.

Dangote Refinery reaffirmed its commitment to transparency, operational efficiency and strengthening Nigeria’s long-term energy security.