Dangote Refinery Explains N100 Rise in Petrol Price
- The Dangote Refinery has increased its petrol ex-depot price by N100, citing rising crude oil costs
- The adjustment pushed the gantry price to N874 per litre, forcing some filling stations to raise pump prices
- The refinery said it still absorbed part of the rising costs while promising to prioritise fuel supplys
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
The Dangote Petroleum Refinery has explained the reason behind the recent increase in its petrol ex-depot price.
The refinery said the adjustment followed higher global crude oil prices and supply disruptions linked to the conflict involving the United States, Israel and Iran.
Source: Getty Images
Legit.ng reported that the Dangote refinery raised its petrol gantry price by N100, increasing the ex-depot rate from N774 to N874 per litre.
Following the adjustment, several filling stations including the Nigerian National Petroleum Company Limited (NNPCL) retail outlets also increased pump prices.
Petrol prices increased from an average of N835 in Lagos and N875 in Abuja to N932 in Lagos and N950 in Abuja.
Dangote explained rise in petrol price
In a statement issued on Thursday, March 5, the refinery said the decision was influenced by a sharp rise in crude oil and freight costs triggered by geopolitical tensions in the Middle East.
According to the company, the crisis has disrupted refining activities and reduced output in some regions, tightening the global supply of refined petroleum products.
The statement reads:
“Dangote Petroleum Refinery & Petrochemicals reassures Nigerians of its commitment to remaining a stabilising force amid the recent volatility in the international oil market.”
The refinery explained that the N100 increase in its ex-depot petrol price represents about a 12% adjustment.
Despite the change, the company said it absorbed part of the rising cost pressures to reduce the impact on the domestic market.
Rising crude oil costs
The refinery noted that the cost of crude oil used for its operations has risen significantly, adding that Nigerian crude currently trades above the Brent benchmark.
According to the company, Nigerian crude oil now sells between $3 and $6 above the Brent price per barrel.
After including freight charges estimated at about $3.50 per barrel, the landing cost of crude at the refinery is said to range between $88 and $91 per barrel.
The company added that although it receives some crude supplies from the NNPC, the volume is insufficient for its operational needs.
Source: Getty Images
It said the refinery currently receives about five cargoes monthly from NNPCL, while it requires around 13 cargoes to fully support production and supply to the Nigerian market.
Due to this shortfall, the refinery explained that it has been forced to source additional crude oil from international traders at higher premiums.
Commitment to domestic supply
Despite the challenges, the refinery said it remains committed to prioritising supply to the Nigerian market in order to reduce the impact of global disruptions.
The company warned that selling petrol below production cost would affect its ability to sustain operations and maintain steady supply.
To improve distribution and lower logistics costs, the refinery said it is accelerating the deployment of trucks powered by Compressed Natural Gas (CNG).
According to the company, the rollout of the CNG-powered trucks is expected to begin this month and will help improve nationwide fuel distribution and delivery timelines.
Cooking gas price increase
Earlier, Legit.ng reported that Depot owners across Nigeria have increased the price of liquefied petroleum gas (LPG), commonly known as cooking gas, by an average of N100 per kilogram.
The increase is the result of a geopolitical turmoil in the Middle East which has affected global energy markets and impacts Nigerian households.
NIPCO Plc, one of Nigeria’s largest LPG distributors, is now selling at N950 per kilogram, Navgas Limited at N900, and Techno Oil Limited at N885.
Source: Legit.ng
