Dangote Refinery Buys Crude at Global Prices Despite Naira Scheme
The Dangote Petroleum Refinery continues to purchase crude oil at international benchmark prices, even under the Federal Government’s crude-for-naira programme, the refinery’s CEO has confirmed.
Speaking to reporters, David Bird, Managing Director of Dangote Petroleum Refinery, emphasized that while the crude-for-naira initiative allows payment in naira, the price of crude remains tied to global benchmarks, meaning the refinery does not benefit from discounted rates.
“We are fully exposed to global commodity markets, including crude pricing, freight, and insurance costs,” Bird stated.
The refinery’s reliance on international prices has affected fuel pricing, with the ex-gantry price of petrol now at ₦1,175 per litre and diesel at ₦1,620.
Bird attributed the increases to soaring global crude prices and higher import costs, partly influenced by geopolitical tensions in the Middle East. Despite the rising costs, Bird assured Nigerians that there would be no fuel shortage and that the refinery remains committed to prioritizing domestic supply.
Analysts note that while the crude-for-naira policy provides payment flexibility, it does not shield local refineries from global market volatility, meaning operational costs remain influenced by international oil trends.
The CEO further highlighted the broader impact of global crude price surges on shipping costs, which now reach up to $3.5 million per tanker shipment, putting additional pressure on fuel supply chains.
Dangote Petroleum Refinery, the largest in Africa, continues to operate at capacity and remains a key player in ensuring Nigeria’s domestic fuel security amidst fluctuating global oil markets.
