NNPC Moves to Secure Foreign Crude for Dangote Refinery Amid Rising Petrol Prices in Nigeria
The Nigerian National Petroleum Company Limited (NNPC) has initiated plans to secure crude oil for the Dangote Petroleum Refinery through third-party international traders. The move aims to sustain domestic refining operations as Nigerians face soaring fuel prices. However, officials caution that this intervention may not immediately translate to lower petrol costs for consumers struggling with recent price surges.
Industry insiders report that the Dangote refinery temporarily suspended Premium Motor Spirit (PMS) loading, fueling speculation about a potential third petrol price hike within a week. Gantry prices have climbed from N774 to N995 per litre, with retail stations in some states now selling petrol for as high as N1,200 per litre. The disruption underscores the ongoing challenge of balancing domestic supply with international market realities.
The spike in fuel prices coincides with geopolitical instability in the Middle East, particularly the Iran–US conflict, which has driven Brent crude above $92 per barrel. Analysts note that the disruption of the Strait of Hormuz, a key energy corridor, has made international crude supply both costly and critical for refiners like Dangote, who currently receive only five domestic cargoes per month instead of the 13 needed under the naira-for-crude policy.
Experts highlight that while importing crude can help maintain refinery operations, it is unlikely to immediately reduce pump prices. Eche Idoko of the Crude Oil Refinery Owners Association of Nigeria emphasizes that expanded domestic crude allocations and policy support for all local refineries could stabilize costs. Similarly, Jeremiah Olatide, CEO of Petroleumprice.ng, stresses the importance of balancing local refining with controlled imports to strengthen energy security and shield consumers from extreme price fluctuations.
To manage operational pressures, Dangote Refinery has broadened its list of petroleum marketers, increasing distribution partners from 13 to over 30 companies nationwide. This includes major players like NIPCO Plc, MRS Oil Nigeria Plc, and TotalEnergies Marketing Nigeria Plc. While foreign crude sourcing remains essential due to local shortfalls, the refinery continues absorbing costs to ensure steady supply, mitigating the impact of rising petrol prices on Nigerian households.
source: punch