Dangote Refinery Absorbs 20% Crude Cost Surge to Stabilise Petrol Supply in Nigeria
Nigeria’s largest refining facility, the Dangote Petroleum Refinery & Petrochemicals, has assured Nigerians that it will maintain a steady supply of petrol despite turbulence in the global oil market. The reassurance comes after fuel marketers recently raised pump prices following rising geopolitical tensions involving the United States, Iran, and Israel. The refinery explained that although petrol prices were adjusted by N100 per litre, it deliberately absorbed about 20% of the surge in crude oil costs to reduce the impact on Nigerian consumers.
In a statement released on March 5, 2026, the company said global refining operations have been disrupted due to the ongoing conflict in the Middle East, forcing some refineries to shut down or cut production. These developments have tightened global petroleum supply, further worsened by a ban from China on the export of gasoline and diesel. According to the refinery, these factors have significantly increased pressure on fuel markets worldwide.
The company also noted that the crisis has pushed international oil prices higher, with Brent crude oil rising roughly 26% within a short period to above $84 per barrel. To reflect these market realities while sustaining operations, the refinery adjusted its ex-depot price of Premium Motor Spirit by N100 per litre, representing about a 12% increase. However, the company stressed that it absorbed a significant portion of the cost increase to help cushion the domestic market.
Further explaining the pressure on its operations, the refinery said Nigerian crude currently trades between $3 and $6 above the Brent benchmark. When freight charges of about $3.50 per barrel are added, the crude delivered to its facility costs between $88 and $91 per barrel. The company also revealed that it receives only about five crude cargoes monthly from the Nigerian National Petroleum Company Limited, far below the 13 cargoes required to support its domestic petrol supply, forcing it to source additional crude from international traders using foreign exchange.
To strengthen fuel distribution nationwide, the refinery said it is accelerating logistics improvements, including the rollout of compressed natural gas-powered trucks this month to reduce transportation costs. The initiative, alongside a supply agreement recently announced by Aliko Dangote with 12 major and independent marketers, will enable the distribution of between 60 million and 65 million litres of petrol daily across Nigeria. The company believes that expanding domestic refining will shield the country from global supply disruptions, reduce foreign exchange pressure, and help prevent severe fuel shortages during periods of international instability.
source: nairametrics