By Francis Ajuonuma
Nigeria’s fuel supply may remain stable despite mounting disruptions in the global oil market, as the Dangote Petroleum Refinery & Petrochemicals says it is prioritising the domestic market to protect the country from potential shortages.
The refinery said global refinery shutdowns and escalating tensions in the Middle East have significantly disrupted international petroleum supply chains, raising concerns about petroleum product shortages in several countries.
According to the company, the conflict has forced some refineries across the world to shut down or cut production, tightening global supply.
The situation has also been worsened by China’s decision to halt exports of gasoline and diesel, further limiting global availability.
“The Dangote Refinery will ensure that Nigeria is insulated from these supply shocks by prioritising supply to the domestic market,” the company said in a statement.
The refinery stressed that domestic refining remains a critical buffer against global energy market volatility and supply disruptions.
It noted that the geopolitical crisis has already driven global crude and freight costs sharply upward, with benchmark Brent crude rising by about 26 per cent within a short period to above $84 per barrel.
In response to the rising costs, the refinery announced a N100 per litre increase in its ex-depot price of Premium Motor Spirit (PMS), representing about a 12 per cent adjustment.
However, the company said it had absorbed about 20 per cent of the cost escalation in order to cushion the impact on consumers.
“This adjustment reflects the realities of the global crude oil market. Selling below cost would undermine our ability to procure crude, sustain production and guarantee uninterrupted supply to Nigerians,” the refinery stated.
Dangote Refinery explained that it continues to purchase crude oil at prevailing international market prices whether sourced locally or from foreign suppliers.
It added that Nigerian crude currently sells at a premium of between $3 and $6 above the Brent benchmark price. When freight costs of about $3.50 per barrel are added, crude oil effectively lands at the refinery at between $88 and $91 per barrel.
“For context, crude oil was landing in our tanks at about $68 per barrel when our ex-depot price was N774 per litre,” the company said.
The refinery also highlighted challenges in sourcing sufficient crude locally despite provisions in the Petroleum Industry Act requiring upstream operators to supply domestic refineries.
It said although it receives about five crude cargoes monthly from the Nigerian National Petroleum Company Limited and pays for them in naira, the supply falls short of the 13 cargoes required monthly to sustain production for the Nigerian market.
“The high crude cost is compounded by the fact that Nigeria’s upstream producers have failed to supply crude oil to the refinery as required under the Petroleum Industry Act, forcing us to source a substantial portion through international traders who charge an additional premium,” the refinery noted.
Despite the challenges, the company maintained that large-scale domestic refining remains essential for protecting Nigeria from severe fuel shortages during periods of global market instability.
It added that local refining reduces exposure to international supply disruptions, moderates foreign exchange demand and strengthens the country’s energy security.
To improve nationwide distribution, the refinery said it is accelerating the rollout of Compressed Natural Gas-powered trucks aimed at improving delivery efficiency, cutting logistics costs and shortening supply timelines across the country.
“The rollout of the CNG-powered trucks will enhance nationwide distribution efficiency, reduce logistics costs and improve delivery timelines across the downstream sector,” the company added.
Dangote Refinery reaffirmed its commitment to transparency, operational excellence and ensuring sustainable energy security for Nigeria.
