The Dangote Petroleum Refinery has defended its latest petrol price increases, attributing the upward adjustments to the cost of crude oil purchased earlier and the lengthy time lag required to secure, ship, and deliver crude to the facility.
The clarification came as the retail pump price of Premium Motor Spirit rose across the country, selling between N1,310 and N1,400 per litre depending on the location. Petrol currently sells for about N1,310 per litre in Lagos and Ogun states, while prices have climbed to N1,350 and above in northern states and distant markets due to transportation and distribution costs.
The latest increase followed the refinery’s decision to raise its PMS gantry price by N65 per litre from N1,200 to N1,265, effective August 29, 2026. The adjustment marked the third price review announced by the company in eight days, bringing the cumulative gantry increase to N100 per litre, or about 8.6 per cent. The refinery had earlier raised its gantry price from N1,165 to N1,185 on August 21, and to N1,200 on August 26, while the coastal PMS price moved from N1,582,380 to N1,669,545 per metric tonne.
Following the price revision, the refinery directed marketers to return existing Authorisations to Collect for repricing to enable the issuance of new volume contracts.
Defending the price adjustments, a senior executive of the Dangote refinery, who spoke on condition of anonymity, stated that prevailing daily international crude prices cannot be used as the sole basis for determining the price of petrol produced from previously acquired inventory.
The executive said, “If you want to buy crude at today’s price, when do you think you will complete the actual transaction to purchase the crude? When will you get a laycan? When can you get a ship chartered and a charter party agreement signed? When will the ship go to load the crude and secure the laycan for discharge? When is the sailing time before the crude eventually gets into your tank?”
He added, “And what will happen to the huge quantities of expensive crude that you bought long ago and stored in the tanks? These are the factors determining the change in prices, not an immediate crude price change,”.
The executive explained that crude procurement involves lengthy transactional stages, vessel chartering, sailing schedules, and port discharge timelines, meaning crude currently being refined was purchased at rates that reflect past market conditions. The company maintained that immediately lowering refined product prices whenever international crude drops would force the refinery to absorb losses on expensive crude stocks. The situation is further compounded by the refinery's reliance on imported crude for between 30 and 40 per cent of its feedstock.
Data published in the Major Energies Marketers Association of Nigeria’s Energy Bulletin for August 27 showed that Dangote’s gantry price stood at N1,200 per litre, which was N22.32 below the spot import-parity estimate of N1,222.32 per litre. However, the subsequent increase to N1,265 placed the new gantry price N42.68 above the August 27 import-parity benchmark.
Meanwhile, petroleum marketers have expressed concern over the persistent price volatility, warning that frequent shifts are creating operational challenges for downstream businesses.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, stated, “We are facing the challenges of the volatility in the market. There are policies of the government, policies of the international market, and exchange rates. These are inherent dispositions to the increase in pump prices. We are not refiners to be able to determine the price of petroleum products.”
Ukadike acknowledged previous price reductions by the refinery, saying, “But, I also believe that Dangote has been consistent in terms of reducing its price in line with the international market rate. With this situation now, we cannot, at this particular point in time, structure our business. It’s going to be too difficult for us to structure our business,”.
He warned that ongoing geopolitical tensions between the United States and Iran could exacerbate pricing instabilities in the global and domestic energy markets.
Ukadike said, “The more the Iran and United States crisis continues to persist, the more we’ll be having these irregularities in price,”.
He added, “Also, bear in mind that the price of crude oil is determined by the international market. So, for all the independent marketers, we will continue to strive. Prices have been fluctuating, and we are still loading. The price of petrol will continue to be volatile as long as the price of crude is not stable and other factors relating to the financial situation,”.
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