Dangote Petroleum Refinery has explained the recent increase in pump prices, citing global market volatility and rising crude oil costs.
The refinery’s Managing Director, David Bird, stated that Nigeria’s domestic refining capacity ensures supply security, shielding the country from fuel shortages and queues despite global disruptions.
The refinery purchases Nigerian crude at international benchmark prices, even under the crude-for-naira arrangement, and is fully exposed to global commodity markets, including crude oil prices, freight rates, insurance, and financing costs.
Key points from the refinery’s explanation include:
- Global Market Volatility: Crude prices have risen from mid-$60 to nearly $120 per barrel within a week.
- Freight Costs Surge: Tanker costs have increased from $800,000 to $3.5 million per shipment.
- Operational Capacity: The refinery operates at 650,000 barrels per day, with potential to increase to 700,000 barrels per day.
The price hike has sparked concerns about its impact on Nigerian consumers, with petrol prices exceeding N1,000 per litre in some states.
