Dangote Refinery Explains What Fall or Rise of Crude Oil Prices May Mean for Investors
- Dangote Refinery says a fall in crude oil prices will not directly affect its profitability because its earnings depend mainly on refining margins
- The refinery says ongoing supply disruptions could temporarily boost its profits by supporting refining margins
- Dangote says investors can expect value appreciation and dollar-denominated dividends, supported by the refinery’s export earnings
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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Dangote Petroleum Refinery has moved to calm concerns among prospective investors, saying a possible fall in global crude oil prices after the ongoing US-Iran conflict will not directly undermine its profitability.
The assurance came from the Vice President of Dangote Industries Limited, Devakumar Edwin, during a media tour and briefing at the refinery on Friday, September 18, 2026.
Source: UGC
Edwin said the refinery’s profitability was tied more closely to refining margins than to the absolute price of crude oil, arguing that fluctuations in crude prices would be reflected in the prices of refined petroleum products.
Crude price swings won’t erase refining margins
Responding to concerns that a drop in crude prices could weaken returns from the refinery’s ongoing initial public offering (IPO), Edwin said the cost of crude was not the primary determinant of the company’s profit margin.
He explained that the refinery operates on a margin-based model, meaning changes in the cost of its raw material would generally be reflected in the selling price of its refined products.
According to him, when crude prices rise, product prices are expected to rise accordingly, while a decline in crude prices would also lead to lower product prices.
Edwin compared the model to a trader who maintains a targeted profit margin regardless of changes in the purchase price of goods.
His comments came amid speculation about what could happen to crude prices if the US-Iran conflict ends and geopolitical tensions ease.
Supply disruptions could boost refinery earnings
While acknowledging the potential for crude prices to decline, Edwin said the ongoing geopolitical crisis could provide a temporary boost to the refinery’s earnings.
He explained that the potential benefit would come from disruptions to the supply of refined petroleum products rather than from higher crude oil prices.
The development could strengthen refining margins if supply constraints persist in international markets, although the impact would depend on market conditions.
Dangote promises dollar-denominated dividends
Edwin also sought to reassure investors over the potential returns from the refinery, dismissing concerns that the current N525 offer price could fall after the company’s shares are listed.
He said Dangote Industries President Aliko Dangote had indicated that the refinery would pay dividends in foreign exchange, giving shareholders the prospect of dollar-denominated returns.
Source: UGC
Edwin said the refinery’s export earnings would provide the foreign exchange needed to support the dividend commitment.
The latest assurances come as Dangote Refinery intensifies efforts to attract millions of Nigerians to its IPO and broaden public ownership of the massive oil-processing facility.
Dangote predicts massive surge in refinery shares
Meanwhile, Legit.ng had earlier highlighted Aliko Dangote’s projection that Dangote Refinery shares could rise from ₦525 to ₦10,000.
We also detailed the proposed IPO, which will allow Nigerians to invest from as little as ₦5,250.
The projection means a ₦5 million investment could potentially grow to more than ₦50 million if the share price reaches Dangote’s target.
Source: Legit.ng
