Petrol Landing Cost Now N70 above Dangote Petroleum Refinery
- Nigeria's petrol landing cost climbed to N1,420 per litre, putting pressure on fuel marketers replenishing stocks at international prices
- The figure sits N70 above Dangote Refinery's current gantry price of N1,350 per litre
- Disruptions to Saudi Arabia's East-West Pipeline and continued Houthi attacks near the Red Sea are driving the spike in replacement costs
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigeria's cost of importing petrol has climbed to N1,420 per litre, data tracked as of Wednesday, September 16, shows, placing significant strain on fuel marketers who are looking to replenish their inventories through international channels.
The figure, which reflects the estimated cost of bringing Premium Motor Spirit (PMS) into Nigeria, including the international product price, shipping, insurance, and related charges, now sits N70 above Dangote Petroleum Refinery's current gantry price of N1,350 per litre.
Source: Getty Images
Petrol replacement cost rises above refinery price
The widening gap is creating a two-tier market dynamic. Marketers who bought stock at earlier, lower prices can still sell competitively, while those restocking now face a sharply higher acquisition cost that is difficult to pass on in a competitive market.
Making the situation more complex, some depot operators in parts of Nigeria are already selling below Dangote Refinery's gantry price, further squeezing margins for import-dependent operators.
At 4:30 am West Africa Time on Wednesday, September 16, Brent crude was trading at $107.50 per barrel, down 1.11%, while West Texas Intermediate (WTI) stood at $104.30 per barrel, a decline of 1.46%.
Despite the dip in early trade, Brent remained close to the $110 mark as concerns over Middle East supply routes continued to weigh on global crude prices.
Middle East disruptions drive up costs
The root of the pressure lies in the escalating US-Iran conflict, which has triggered a series of supply disruptions across the Middle East. Saudi Arabia's East-West Pipeline, which has the capacity to move about 4 million barrels of crude oil per day, was shut down following attacks.
Petroluemprice.ng reports that Houthi forces have also continued strikes around the Red Sea and the Bab el-Mandeb strait, two critical corridors for moving crude oil and refined products between the Middle East and international markets.
Any prolonged closure of these routes pushes up freight and insurance costs, which feed directly into the landing cost faced by import-reliant markets like Nigeria.
Dangote Refinery says 75m litres daily petrol capacity
Earlier, Legit.ng reported that Dangote Petroleum Refinery has said its production capacity is sufficient to cover a significant share of Nigeria’s domestic fuel requirements.
The refinery can produce about 75 million litres of petrol daily, compared with estimated national consumption of roughly 50 million litres. Its daily diesel output capacity stands at about 25 million litres, against estimated demand of 14 million litres.
The facility also has the capacity to produce around 20 million litres of aviation fuel each day, significantly above current domestic consumption.
Source: Legit.ng
