Dangote Refinery Explains N100 Petrol Price Increase Amid Global Crude Oil Surge
The Dangote Petroleum Refinery has officially clarified the reasons behind its recent decision to increase the ex-depot price of petrol by N100. This adjustment, which took effect in early March 2026, has raised the gantry price from N774 to N874 per litre, subsequently forcing numerous filling stations across Nigeria to adjust their pump prices upward.
Geopolitical Tensions Drive Cost Pressures
In a detailed statement released on Thursday, March 5, the refinery attributed the price hike primarily to escalating global crude oil prices and significant supply disruptions. These market disturbances are directly linked to the ongoing geopolitical conflict involving the United States, Israel, and Iran, which has created volatility in international energy markets.
The refinery emphasized that the crisis has severely disrupted refining activities and reduced output in key regions, thereby tightening the global supply of refined petroleum products. This situation has compelled the refinery to adjust its pricing to reflect the increased cost of raw materials and operational expenses.
Impact on Nigerian Fuel Market
Following the ex-depot price adjustment, several major filling stations, including outlets operated by the Nigerian National Petroleum Company Limited (NNPCL), have increased their pump prices. Reports indicate that petrol prices have risen from an average of N835 in Lagos and N875 in Abuja to approximately N932 in Lagos and N950 in Abuja, marking a significant burden on consumers.
The N100 increase represents about a 12% adjustment in the ex-depot price. Despite this hike, Dangote Refinery stated that it has absorbed part of the rising cost pressures to mitigate the impact on the domestic market, demonstrating a commitment to stabilizing fuel supply in Nigeria.
Rising Crude Oil and Freight Costs
The refinery provided specific details on the cost increases, noting that the price of Nigerian crude oil has surged significantly. Currently, Nigerian crude trades between $3 and $6 above the Brent benchmark price per barrel. When combined with freight charges estimated at around $3.50 per barrel, the landing cost of crude at the refinery ranges from $88 to $91 per barrel.
Furthermore, the refinery highlighted a supply shortfall from NNPCL, which provides only about five cargoes of crude monthly. This is insufficient to meet the refinery's operational needs, as it requires approximately 13 cargoes to fully support production and supply to the Nigerian market. Consequently, the refinery has been forced to source additional crude oil from international traders at higher premiums, exacerbating cost pressures.
Commitment to Domestic Supply and Future Plans
Despite these challenges, Dangote Refinery reaffirmed its dedication to prioritizing supply to the Nigerian market. The company warned that selling petrol below production cost would jeopardize its ability to sustain operations and maintain a steady fuel supply, potentially leading to more severe disruptions.
To enhance distribution efficiency and reduce logistics costs, the refinery is accelerating the deployment of trucks powered by Compressed Natural Gas (CNG). The rollout of these CNG-powered trucks is expected to commence this month, aiming to improve nationwide fuel distribution and delivery timelines, thereby offering some relief in the long term.
Broader Energy Market Implications
The price increase at Dangote Refinery coincides with broader energy market turmoil. Earlier reports indicated that depot owners across Nigeria have raised the price of liquefied petroleum gas (LPG), commonly known as cooking gas, by an average of N100 per kilogram. This hike is also attributed to geopolitical tensions in the Middle East, affecting global energy markets and impacting Nigerian households.
Major LPG distributors such as NIPCO Plc, Navgas Limited, and Techno Oil Limited have adjusted their prices accordingly, reflecting the interconnected nature of energy costs and global events.
Dangote Petroleum Refinery & Petrochemicals has reassured Nigerians of its commitment to remaining a stabilizing force amid the recent volatility in the international oil market. The company continues to monitor global trends and adjust its strategies to ensure reliable fuel supply while navigating the complex economic landscape.
