Dangote refinery reduces petrol gantry price to ₦1,200 per litre

The Dangote refinery has just announced that it's lowering the price it charges for petrol right at the loading point, bringing it down to ₦1,200 per litre. This means petrol is now ₦75 cheaper than it was before, when the price was ₦1,275 per litre.

Recall that the refinery actually raised its petrol price a few times recently – it went up from ₦1,175 per litre on March 13th to ₦1,245 per litre on March 20th, and then hit ₦1,275 per litre on March 21st.

In a statement shared on Thursday, the refinery also mentioned that the price for petrol at its coastal facilities has dropped too, now sitting at N1,153 per litre.

“Dangote Petroleum Refinery & Petrochemicals has reduced its gantry price for petrol to N1,200 per litre and its coastal price to N1,153 per litre, a move that comes amid ongoing tensions in the Middle East that continue to influence global oil markets,” the statement reads.

“The adjustment marks a downward review in the refinery’s pricing structure and is expected to influence fuel supply costs across distribution channels, including depots and retail outlets.”

This latest news comes even though the price of Brent crude oil, the global standard, has been going up, hitting $100.54 per barrel just on Thursday.

READ ALSO: Nigerians Gear Up for Hike in Fuel Cost as Dangote Refinery Increases Price to ₦1,245 per Litre

Oil prices had dropped to $96 a barrel on Monday. That happened right after US President Donald Trump announced he was putting off any military strikes against Iran's power plants and energy facilities for five days.

And let's not forget that back on March 13th, the International Energy Agency (IEA) stated that the ongoing conflict is causing the biggest supply disruption the global oil market has ever seen.

In a recent interview on Arise TV, the Chief Executive Officer of Dangote Refinery, David Bird, said the facility is receiving far below its agreed crude oil supply under the Federal Government’s crude-for-naira arrangement.

Bird disclosed that they're only getting about five shipments of crude oil each month, whereas they expected to receive between 13 and 15. 

This shortfall, he added, is making it difficult for the refinery to make the most of its local crude supply, even though all the existing agreements are fully in place.

“What we see under that agreement, we should be getting about 13 to 15 cargoes a month. And that’s what we could process to meet the domestic fuel requirements of Nigeria. Currently, we’re only getting five. So, that’s an underperformance against that pre-agreed volume contract,” he said.

According to him, the gap has forced the refinery to source preferred Nigerian crude grades from the international market at higher costs.

“And that value between the purchase price and the premium that we’re now seeing is money that Nigeria is leaking to the international trading community,” he said.

He explained that the crude-for-naira policy was designed to stabilise Nigeria’s foreign exchange market rather than provide financial advantages to the refinery, noting that the company still purchases crude at international benchmark prices.

“Just to start on the crude for Naira, crude for Naira is not there to benefit Dangote Refinery. That is a fundamental misunderstanding. The crude for Naira programme is to provide resilience to foreign exchange.

“It is the benefit of the country to process domestic crude in the domestic currency,” Bird said.

Bird confirmed that, despite the supply challenges they're facing, the refinery is still running at its maximum installed capacity of 650,000 barrels daily, and it's supplying both the local market and the surrounding region.

However, he pointed out that disruptions in the global oil market, especially the tensions in the Middle East, have driven up operational costs throughout the refinery's entire process – things like shipping, insurance, and logistics have all become more expensive.

Bird also emphasized that the price of fuel is still determined by what's happening in the international markets, stressing that the refinery isn't receiving any subsidies or discounts on the crude oil it uses.

He urged better planning when it comes to allocating crude oil and for long-term strategies, like building up national reserves, to make Nigeria's oil sector supply chain more robust and able to handle difficulties.