The management of Dangote Petroleum Refinery has attributed the recent increase in fuel prices to rising global crude oil costs and other international market pressures.
The refinery’s Managing Director and Chief Executive Officer, David Bird, disclosed this during a press briefing on Monday.
He explained that the facility operates within global commodity markets and is therefore affected by fluctuations in crude oil prices and other associated costs.
Bird said the refinery remains fully exposed to international pricing factors such as crude oil benchmarks, freight charges, insurance premiums, and financing costs, all of which have recently surged.
He noted that although Nigeria introduced a crude-for-naira policy to enable local refineries purchase crude oil using the local currency, the price of crude remains linked to global market benchmarks.
According to him, this means the refinery still buys Nigerian crude oil at prevailing international rates rather than at a discounted price.
The refinery boss said the global oil market has experienced sharp volatility in recent days, with crude oil prices rising rapidly from the mid-$60 range to nearly $120 per barrel within a week.
He also pointed to rising shipping costs as another major factor affecting operations.
According to the refinery, the cost of transporting crude oil has increased significantly, with tanker freight charges jumping from about $800,000 to approximately $3.5 million per shipment in the current market environment.
Despite the rising operational costs, Bird said the refinery continues to operate at its full installed capacity of about 650,000 barrels per day, with the ability to scale up production to around 700,000 barrels per day.
Meanwhile, the refinery recently adjusted its ex-depot prices for petroleum products.
Under the new pricing structure, the gantry price of Premium Motor Spirit (PMS), commonly known as petrol, has been raised to N1,175 per litre, while Automotive Gas Oil (AGO), or diesel, now sells at N1,620 per litre.
The latest adjustment represents the fourth price revision within two weeks as global oil market volatility continues to influence domestic fuel pricing.
The petrol price rose sharply from its previous level of N995 per litre, while diesel increased from about N1,430 per litre.
Industry analysts said the price changes reflect the ongoing surge in international oil benchmarks, with Brent crude trading above $102 per barrel and West Texas Intermediate (WTI) crossing $101 per barrel amid global supply concerns.
The volatility in energy markets has been largely linked to escalating geopolitical tensions involving the United States, Israel, and Iran.
The conflict has disrupted global trade routes and heightened security risks in the Middle East, particularly around the Strait of Hormuz, a strategic maritime corridor through which roughly one-fifth of the world’s oil supply passes.
Security threats in the region have forced some oil tankers to avoid the route, slowing shipping activity and pushing up insurance and transportation costs.
Analysts warned that a prolonged crisis could further disrupt global oil supply chains and intensify pressure on energy prices worldwide.
