The Dangote Refinery has explained the recent increase in the price of petrol, stating that the adjustment reflects the rising cost of crude oil in the international market.
According to the company, the new price represents about a 12 per cent increase. However, it noted that it absorbed nearly 20 per cent of the additional cost in an effort to reduce the financial burden on consumers.
The refinery explained that it purchases crude oil at international market prices regardless of whether the supply comes from Nigeria or other countries. Nigerian crude is typically priced between $3 and $6 above the Brent benchmark, while shipping costs add about $3.50 per barrel.
As a result, the cost of crude oil delivered to the refinery now ranges between $88 and $91 per barrel. This marks a significant rise from the previous cost of about $68 per barrel when petrol was sold at ₦774 per litre.
The company further disclosed that it currently receives about five cargoes of crude oil monthly from the Nigerian National Petroleum Company Limited (NNPC), which are paid for in naira. However, the refinery requires approximately 13 cargoes each month to meet Nigeria’s fuel demand.
Due to this shortfall, the refinery said it has to purchase additional crude oil from international traders using foreign exchange.
Despite these challenges, the company emphasized that large-scale domestic refining remains beneficial for Nigeria, as it reduces dependence on fuel imports and helps shield the country from global supply disruptions.
“This is one of the many benefits of domestic refining,” the refinery stated, noting that local refining can significantly reduce Nigeria’s vulnerability to international supply shocks.
In addition, the company revealed plans to improve fuel distribution nationwide by introducing trucks powered by compressed natural gas (CNG). The rollout of the CNG-powered trucks is expected to begin this month, aimed at speeding up delivery and lowering transportation costs.
Comments