… Dangote says NNPC supplies only 5 of 13 monthly cargoes needed to meet domestic petrol demand
… blames IOCs’ PIA non-compliance, turns to costlier international crude even at premium
Oredola Adeola
Dangote Petroleum Refinery & Petrochemicals has attributed the rise in Premium Motor Spirit (petrol) prices—selling between ₦932 and ₦975 per litre at some MRS Oil outlets—to higher Nigerian crude costs at its Lagos refinery.
The refinery explained that crude now lands between $88 and $91 per barrel, reflecting rising global crude and freight costs due to tensions in the Middle East, which have also pushed up the Brent benchmark.
This was disclosed in a statement released by the Refinery on Thursday and obtained by Advisors Reports.
The refinery explained that Nigerian crude delivered to its facility in Lekki, Lagos State, now trades $3–$6 above the Brent benchmark, reflecting tightening global supply and rising freight costs.
According to the company, it currently receives five monthly cargoes from the Nigerian National Petroleum Company Limited, paid for in Naira at international market prices plus a premium—far below the 13 cargoes required to sustain domestic sales.
To bridge the supply gap, the refinery said it has been sourcing additional crude from local and international traders, paying for the cargoes in foreign exchange at open market rates, often with added premiums.
The company further noted that upstream producers have failed to supply crude as required under the Petroleum Industry Act (PIA), forcing the refinery to rely more on international purchases and increasing cost pressures.
Dangote explained that when crude oil previously landed at its tanks at about $68 per barrel, the refinery’s ex-depot price stood at ₦774 per litre.
It explained that with crude oil prices now landing between $88 and $91 per barrel at its facility, in addition to freight costs of $3.50 per barrel, the ex-depot price has risen to between ₦874 and ₦880 per litre as of March 3.
The refinery also pointed to broader global supply pressures, noting that Middle East tensions have led to refinery shutdowns and reduced production across parts of the world, tightening the supply of petroleum products.
“China has banned exports of gasoline and diesel. The Dangote Refinery will ensure that Nigeria is insulated from these supply shocks by prioritising supply to the domestic market,” the company said.
Dangote further noted that as a private enterprise operating in a deregulated market, it has aligned pricing with prevailing market realities to ensure sustainability, stressing that selling below cost would undermine its ability to procure crude, sustain production and guarantee uninterrupted supply to Nigerians.
Despite these pressures, the company said large-scale domestic refining helps reduce exposure to international supply disruptions, moderate foreign exchange demand and protect the country from severe shortages during periods of global instability.
The refinery also confirmed that the rollout of Compressed Natural Gas (CNG)-powered trucks will commence this March, a move expected to cushion the impact of global shocks, improve nationwide distribution efficiency, reduce logistics costs and enhance delivery timelines across the downstream sector.
