The Managing Director and Chief Executive Officer of Dangote Petroleum Refinery, David Bird, has said fuel prices may not drop even though the refinery is running at full capacity, pointing to the sharp volatility in the global oil market.
Speaking during a media briefing on Monday, Bird explained that the refinery operates within the international commodity market and is therefore affected by global pricing dynamics, stressing that this reality must be clearly understood. “We are fully exposed to the international commodity market.
That needs to be widely understood. We purchase, even under the Crude for Naira programme, we purchase Nigerian crude from the Nigerian government at international benchmark-related prices. We then pay international freight rates and international insurance rates in order to bring that crude from the terminal to the refinery,” he said. Bird disclosed that Nigerian crude makes up about 30 to 35 per cent of the refinery’s total crude supply, while the remaining portion is sourced from the open market in US dollars, often passing through several traders before reaching the refinery, thereby increasing costs. “All that does is add further costs and premium to purchasing those Nigerian barrels and processing them through Dangote Refinery,” he said. He added that the facility has processed several types of crude oil, mainly West Texas Intermediate, as well as grades obtained from South America, Central America and West Africa.
Bird acknowledged the financial strain on consumers, noting that the refinery is working to reduce expenses across its supply chain. “I fully acknowledge the pain that is being suffered. We are seeing that. We are doing what we can to ensure that we minimise costs throughout our supply chain,” he said. Highlighting the volatility in the global market, he revealed that Brent crude, which traded around the mid-$60 range a week earlier, had risen to $118, while tanker freight costs had increased from about $800,000 to roughly $3.5 million per shipment. Key points shared by the Dangote Group on its official X account after the media session indicated that the refinery’s exposure to global commodity markets includes crude prices, freight, insurance and financing costs, with import-dependent nations experiencing the greatest impact as the global oil crisis deepens.
The statement also noted that local refining has strengthened Nigeria’s supply security, helping the country avoid fuel shortages and queues even when global markets face disruptions, while also clarifying that the refinery does not receive discounted crude under the crude-for-naira arrangement because Nigerian crude is still purchased at international benchmark prices. Bird further stated that the refinery is currently operating at its full installed capacity of about 650,000 barrels per day and could potentially increase output to around 700,000 barrels per day, assuring that the plant will continue to supply fuel to meet Nigeria’s demand despite global supply challenges. Earlier on Monday, the refinery raised the gantry price of Premium Motor Spirit to N1,175 per litre from N995 per litre announced on Friday, representing an increase of N180, or about 18.1 per cent, within three days. This marked the third price adjustment within a week, with gantry prices having risen from N774 per litre the previous week, while retail pump prices in several states have already crossed N1,000 per litre, with some filling stations selling petrol for about N1,200 per litre.
