Nigeria’s Dangote Petroleum Refinery said it will prioritise supplying the domestic market as global energy supply tightens following escalating conflict involving the United States, Israel and Iran.
The refinery’s decision comes as fuel prices in Nigeria have begun to rise amid growing volatility in international oil markets triggered by the geopolitical crisis.
Nigeria’s largest private refinery said it recently raised its petrol ex-depot price by about 7.5 cents per litre, representing roughly a 13 percent increase, after higher crude oil and shipping costs pushed up production expenses.
As a result, pump prices have climbed from around US$0.63 per litre to about $0.74 per litre, reflecting the impact of rising global energy costs on Africa’s biggest oil producer.
Despite the adjustment, the refinery said it had absorbed part of the cost increase in order to limit the impact on the domestic market.
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The Dangote Petroleum Refinery has emerged as a key supplier of refined fuel to Nigeria since it began ramping up operations, helping reduce the country’s long-standing reliance on imported petroleum products.
According to recent data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the refinery’s petrol supply to the domestic market has reached 40.1 million litres per day.
That figure accounts for just over two-thirds of Nigeria’s estimated daily demand of about 60 million litres.
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Production of diesel, also known as gasoil, has also increased significantly.
The refinery recently doubled its daily output to 10.9 million litres, exceeding half of the country’s estimated daily requirement of around 16 million litres.
The facility relies partly on crude supplies from the state-owned Nigerian National Petroleum Company Limited.
Dangote said it currently receives about five cargoes of crude oil each month from the national oil company, which it pays for in the local currency, the naira.
However, the refinery said it requires approximately 13 cargoes per month to sustain supply to the domestic market.
To bridge the gap, it has been sourcing additional crude oil at international market prices, whether from local producers or overseas suppliers.
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The company noted that Nigerian crude grades are currently trading at a premium of US$3 to $6 per barrel above Brent crude, making feedstock purchases more expensive for domestic refiners.
The surge in fuel prices is closely watched by policymakers and economists in Nigeria because energy costs play a major role in shaping inflation.
Transport and logistics expenses are heavily dependent on fuel prices, meaning any increase in petrol or diesel costs can quickly translate into higher food and consumer prices.
Nigeria has been battling elevated inflation in recent years, with energy and transportation costs among the key drivers.
Analysts say the Dangote Petroleum Refinery could play a critical role in stabilising the domestic fuel market by ensuring steady local supply, particularly during periods of global market disruption.
By prioritising domestic deliveries, the refinery may help cushion Nigeria from international supply shocks at a time when geopolitical tensions are adding uncertainty to global energy markets.
