The Dangote Petroleum Refinery has explained that the cost of fuel in Nigeria is heavily influenced by global crude oil prices and other international market factors.
The management of the refinery said its operations are directly affected by fluctuations in international commodity markets, including crude oil prices, shipping costs, insurance, and financing expenses.
Speaking during a press briefing in Lagos, the Managing Director and Chief Executive Officer of the refinery, David Bird, said the company operates within a global pricing system despite refining crude locally.
He noted that although Nigeria introduced a crude-for-naira initiative to help domestic refineries buy crude oil using the local currency, the actual pricing of crude remains linked to international benchmarks.
According to him, the refinery still purchases Nigerian crude oil at global market prices, meaning it does not receive any discounted supply despite operating within the country.
Bird explained that the impact of global market volatility has been significant in recent weeks, especially with the sharp rise in crude oil prices.
He said crude prices recently jumped from around the mid-$60 range to nearly $120 per barrel within a short period, reflecting growing uncertainty in the international energy market.
The refinery also disclosed that shipping costs have surged dramatically due to global tensions affecting maritime trade routes.
Freight charges for transporting crude oil have increased from about $800,000 per shipment to approximately $3.5 million in the current market environment.
Despite these challenges, the company said the refinery continues to operate at its full production capacity of about 650,000 barrels per day, with the potential to increase output to roughly 700,000 barrels daily.
The clarification comes shortly after the refinery revised its ex-depot prices, raising the gantry price of Premium Motor Spirit, also known as petrol, to ₦1,175 per litre.
Automotive Gas Oil, commonly referred to as diesel, was also increased to ₦1,620 per litre.
Industry analysts say the price adjustments reflect the pressure created by rising global crude prices and the increasing cost of transporting petroleum products.
The surge in energy prices has been partly linked to growing geopolitical tensions involving the United States, Israel, and Iran, which have disrupted global trade and energy supply routes.
One of the most affected routes is the Strait of Hormuz, a key passage through which nearly one-fifth of the world’s oil shipments pass.
Security threats around the area have forced some oil tankers to avoid the route, leading to delays, higher shipping insurance costs, and tighter global supply.
Experts warn that if the crisis continues, it could further affect oil supply chains and push global energy prices even higher.
The situation highlights the growing impact of international geopolitical developments on Nigeria’s domestic fuel market and the wider energy sector.
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