Dangote Petroleum Refinery and Petrochemicals reassures Nigerians of its unwavering commitment to serving as stabilising force amid recent shocks in the International oil market.
The conflict in the Middle East has led to the shot down of some refineries and cut in refinery production across the world. This is leading to a global scarcity of petroleum products. China has banned export of gasoline and diesel. The Dangote refiney will ensure that Nigeria is insulated from these supply shocks by prioritizing supply to the domestic market. This is one of the many benefits of domestic refining.
The conflict has driven global crude and freight prices sharply higher, with benchmark Brent prices rising by 26% within a short period to above $84.0 per barrel. In response the refinery implemented a measured adjustment of N100 per litre in its ex – depot price of Premium Motor Spirit, for now, to cushion the domestic market. This is despite continuing to source at prevailing international market prices, whether purchased locally or from foreign suppliers.
It is worth noting that Nigerian crude oil is more expensive that the Brent benchmark price by $3 to $6 per barrel. After adding freight of $3.50 per barrel, crude oil will be landing our tanks between $88 and $91 per barrel. For context, crude oil was landing our tanks at about $68 per barrel when our ex – depot price was N774/ litre.
Furthermore, while we receive about five cargoes a month from NNPC Limited which we pay for in Naira, these cargoes are priced at international market price + premium and fall short of 13 cargoes which we therefore, end up procuring foreign exchange at open market rates to pay for crude cargoes purchased from local and international traders.
The high crude cost is compounded by the fact that Nigeria upstream producers have failed to supply crude oil to the refinery as required under the Petroleum Industry Act, forcing us to source a substantial portion through international traders who charge an additional premium.
As a private enterprise operating in a deregulated environment, Dangote Petroleum Refinery has remained responsive and has made a significant sacrificed by aligning its crude at a prevailing international market prices. Selling below cost would undermine its ability to procure crude, sustain production and guarantee uninterrupted supply to Nigerians.
Despite this pressure, local refining at this scale continued to reduce exposure to international supply distruptions, moderate foreign exchange demand and protect the country from severe shortages during periods of global instability.
The refinery is also accelerating deployment of Compressed Natural Gas – powered trucks to cushion the impact of global shocks, enhance nationwide distribution efficiency, reduce logistics costs and improve delivery timeline across the downstream sector. The rollout is scheduled to commence this month.
we remain committed to transparency, operational excellence and long – term objective of securing sustainable energy security and stability for Nigeria at an affordable cost.
