LAGOS, NIGERIA — As geopolitical tensions between the United States, Israel, and Iran send shockwaves through the global energy market, the Dangote Petroleum Refinery has moved to insulate Nigeria from the looming threat of fuel scarcity.
Managing Director David Bird announced on Monday that the refinery is now operating at its full 650,000 barrels per day (bpd) nameplate capacity.
This milestone, he said, allows the facility to produce between 50 million and 55 million litres of petrol daily, comfortably exceeding Nigeria’s average daily consumption of 35 million litres.
A Buffer Against Global Volatility
The global oil market has witnessed extraordinary volatility in the past week, with Brent crude spiking from the mid-$60s to nearly $120 per barrel.
This surge, accompanied by rising freight and insurance costs, has forced several nations to begin rationing fuel.
“What would be worse than $120 oil is no oil. While other countries are implementing rationing because they rely completely on imports, Nigeria now enjoys a critical advantage: supply security made possible by domestic refining,” Bird stated during a media briefing in Lagos.
He noted that freight costs alone have surged from $800,000 to roughly $3.5 million per shipment, a cost the refinery must absorb as it remains exposed to international commodity rates.
The Pricing Reality
Despite the supply security, Bird cautioned that local pump prices are not immune to global trends. Even under the crude-for-naira arrangement, the refinery purchases its feedstock at international benchmark prices.
“Pricing is determined largely by global commodity markets,” Bird explained.
He clarified that while the refinery guarantees availability, any decisions regarding price interventions or subsidies remain the prerogative of the Federal Government.
Prioritising the Home Front
With the refinery's Crude Distillation Unit (CDU) and Motor Spirit (MS) block fully optimised following maintenance earlier this year, Bird affirmed that the primary focus is the domestic market.
“We will ensure that Nigeria enjoys fuel abundance, not fuel scarcity,” he promised.
This commitment, however, hinges on the continued support of the Nigerian National Petroleum Company Limited (NNPCL) in providing a steady stream of domestic crude.
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