Dangote Refinery Warns Coastal Fuel Logistics Could Push Petrol Prices to ₦1,000 Per Litre

Dangote Petroleum Refinery has warned that continued dependence on coastal logistics for fuel distribution could drive petrol pump prices as high as ₦1,000 per litre if the added costs are passed on to consumers. The refinery raised the alarm in a statement on Thursday, highlighting how shipping petroleum products by sea significantly increases distribution expenses compared to pipelines or direct truck loading.

According to the company, while fuel marketers are free to choose how they evacuate products, coastal logistics introduces avoidable cost pressures that threaten recent price stability achieved through local refining. Dangote Refinery stressed that these extra expenses could ultimately be borne by Nigerians, either directly through higher pump prices or indirectly through increased operating costs for producers.

The refinery estimated that coastal transportation can add about ₦75 per litre to the cost of petrol. With Nigeria consuming an average of 50 million litres of PMS and 14 million litres of diesel daily, this could translate to an additional annual burden of roughly ₦1.752 trillion. The company warned that such costs could quickly erase the benefits of increased domestic fuel supply.

Dangote Refinery explained that coastal logistics involves port charges, maritime levies, vessel-related expenses, and other fees that do not improve fuel quality or availability for consumers. It maintained that gantry-based truck loading remains the most cost-effective evacuation method, noting that its facility has 91 loading bays capable of dispatching up to 2,900 tankers daily while bypassing costly port and marine charges.

The refinery linked the issue to Nigeria’s broader energy transition, noting that local refining has already helped reduce diesel prices from about ₦1,700 to below ₦1,000 per litre and PMS prices from roughly ₦1,250 to between ₦839 and ₦900. It warned, however, that without coordinated investment in efficient pipelines and distribution infrastructure, logistics costs could become the next major driver of fuel price increases, undermining gains from local refining and market stability.

source: nairametrics