LAGOS, NIGERIA – As geopolitical tensions in the Middle East trigger a wave of global refinery shutdowns and export bans, the Dangote Petroleum Refinery has reaffirmed its role as Nigeria’s strategic energy lifeline, prioritising domestic supply to insulate the nation from a looming global fuel scarcity.
The international oil market has been thrown into disarray, with benchmark Brent crude prices surging 26% to over $84 per barrel.
Key global players, including China, have responded by banning the export of petrol and diesel to protect their interests.
In this climate of uncertainty, the Dangote Refinery serves as a critical buffer. By refining crude locally, the facility ensures that Nigeria is no longer at the mercy of international supply disruptions that have historically led to crippling shortages.
Despite the rising costs of crude and freight, the refinery has taken steps to protect Nigerian consumers. While international cost escalations hit 32%, the refinery implemented a measured adjustment of only N100 per litre (approximately 12%) to its ex-depot price.
By absorbing 20% of these rising costs, the refinery is effectively subsidising the impact of the global market on the Nigerian pocket.
This comes even as the facility faces the reality of purchasing Nigerian crude, which often trades at a $3 to $6 premium over Brent—landing in tanks at prices between $88 and $91 per barrel.
The refinery highlighted ongoing structural hurdles, noting that while the Nigerian National Petroleum Company (NNPC) provides five cargoes per month paid for in Naira, this falls short of the 13 cargoes required to meet total domestic demand.
Furthermore, the refinery continues to face chal,lass with local upstream prodfailailing to supply crude as mandated under the Petroleum Industry Act (PIA).
This has forced the private enterprise to source the deficit from international traders at open-market foreign exchange rates, adding significant premiums to production costs.
“Selling below cost would undermine our ability to procure crude and guarantee uninterrupted supply,” the refinery stated, emphasising its commitment to remaining a sustainable, private-sector-led solution to Nigeria's energy needs.
To further drive down costs for the end-user, Dangote is accelerating the deployment of Compressed Natural Gas (CNG)-powered trucks.
Scheduled to commence rollout this month, these vehicles are designed to reduce logistics expenses and improve the speed of nationwide fuel distribution, offering a cleaner and more cost-effective alternative to traditional diesel-heavy transport.
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