Oil marketers in Nigeria have shifted their stance to support the Dangote Refinery supplying the entire local market for petrol, a reversal from their earlier opposition to a monopoly. The change follows a severe supply crisis triggered by escalating conflict in the Middle East, which disrupted global crude oil flows and pushed local petrol prices above ₦1,000 per litre.
The Middle East tensions contributed to volatile crude prices, with Brent rising above $100 per barrel before settling around $88. This volatility directly impacted Nigeria’s fuel costs, as importation became economically unfeasible. In response to rising input costs, the Dangote Refinery initially increased its gantry price to ₦1,175 per litre, leading retailers nationwide to adjust pump prices to between ₦1,200 and ₦1,300 or more.
However, the refinery announced a significant price reduction effective Tuesday. The gantry price for Premium Motor Spirit (PMS) dropped by ₦100 to ₦1,075 per litre, while coastal distribution prices fell by ₦122 to ₦1,028 per litre. Diesel prices were also cut by ₦190 to ₦1,430 per litre. A company statement attributed the revision to movements in global oil prices.
This adjustment has been welcomed by petroleum marketers. Dr. Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), described the refinery as “our salvation” during a television interview. He argued that full reliance on domestic refining is preferable to scarcity, especially with imports halted by the ongoing war. “If Dangote has to have 100 per cent of the domestic retail outlets, it is only for the benefit of Nigeria,” Gillis-Harry stated, noting that marketers now source all products from the refinery.
Economist and oil and gas expert Kelvin Emmanuel provided context for the price dynamics. He explained that the Dangote Refinery sources less than 50% of its crude from Nigeria, importing the rest from countries like the US and Brazil. The war has drastically increased shipping costs, with vessel rates for transporting crude across the Atlantic nearly doubling to around $80,000 per day, excluding local levies. Furthermore, Emmanuel highlighted that crude purchased domestically often carries an untaxed premium paid through third parties, contravening the Petroleum Industry Act, which raises local production costs compared to imports.
He urged the federal government to address local crude pricing mechanisms and clarify whether the refinery is supplied in naira or dollars to stabilise downstream costs. While current petrol prices at the refinery remain low by global standards—approximately 182 cents per litre—the underlying logistical and sourcing expenses continue to influence the final pump price.
The situation underscores Nigeria’s fragile dependency on imported fuel and the critical role of the Dangote Refinery in buffering the economy from external shocks. As global uncertainty persists, the refinery’s operations and government policy on domestic crude supply will remain central to the nation’s fuel security and price stability.
