Nigeria’s downstream petroleum sector has been thrown into fresh uncertainty following a new increase in petrol prices by the Dangote Petroleum Refinery. The refinery has raised its gantry (ex-depot), price of Premium Motor Spirit (PMS), commonly known as petrol, to ₦995 per litre, marking one of the sharpest price jumps in recent months.
The latest adjustment is expected to trigger another rise in pump prices nationwide, potentially pushing the cost of petrol at filling stations above ₦1,050 per litre depending on transportation costs and marketers’ margins.
Rapid Price Increase Within Days
The new price represents a dramatic surge over a short period. According to industry data, the refinery’s petrol price has moved as follows within just a few days:
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₦774 per litre – previous gantry price
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₦874 per litre – first upward review earlier in the week
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₦995 per litre – latest adjustment
This means the price increased by about ₦221 per litre within four days, representing roughly a 29% rise in the ex-depot price of petrol.
Officials at the refinery confirmed the revision, noting that the price review was necessary due to changes in global oil market conditions.
Why Dangote Refinery Increased Petrol Prices
The refinery attributed the increase largely to global market pressures affecting petroleum products. Several factors are believed to be responsible:
1. Rising Global Crude Oil Prices
Industry reports indicate that international crude oil prices have surged significantly in recent weeks, pushing up the cost of producing refined products.
2. Higher Landing and Production Costs
Landing costs for petrol have reportedly climbed sharply, with estimates suggesting they rose from $68 to around $91, increasing the cost of fuel supply globally.
3. Geopolitical Tensions
Conflicts in parts of the Middle East have disrupted refining operations and reduced global supply, further driving up petroleum prices.
4. Deregulated Nigerian Fuel Market
Since Nigeria removed petrol subsidies and allowed market-driven pricing, refiners and marketers now adjust prices in response to international market conditions.
Impact on Petrol Pump Prices
The new gantry price means marketers purchasing petrol from the refinery will likely increase pump prices across the country.
Industry estimates suggest:
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Petrol may sell above ₦1,050 per litre in several cities.
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Prices may vary based on logistics, transportation costs, and marketers’ margins.
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Urban areas closer to supply hubs may experience slightly lower prices compared to remote regions.
For many Nigerians, this could translate into higher transport fares and rising cost of goods, as fuel costs often affect food prices, logistics, and manufacturing.
Dangote Refinery’s Role in Nigeria’s Fuel Market
The Dangote Petroleum Refinery, located in Lekki, Lagos, is one of the largest single-train refineries in the world with a projected refining capacity of about 650,000 barrels per day.
The facility was built to:
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Reduce Nigeria’s dependence on imported fuel
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Stabilise domestic supply of refined petroleum products
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Potentially export excess fuel to other African markets
Despite these goals, petrol prices in Nigeria still remain strongly tied to global crude oil prices and foreign exchange rates.
Concerns Among Nigerians
The latest price hike is likely to intensify concerns among consumers and businesses already struggling with high living costs.
Analysts warn that sustained increases in petrol prices could lead to:
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Increased transportation costs
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Higher inflation and food prices
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Greater pressure on households and small businesses
At the same time, industry experts argue that local refining capacity from the Dangote refinery could help cushion Nigeria from even higher prices caused by global supply disruptions.
Conclusion
The decision by Dangote Refinery to raise its petrol price to ₦995 per litre marks a significant development in Nigeria’s fuel market. While the refinery attributes the move to rising global crude prices and supply disruptions, the adjustment could quickly translate into higher pump prices across the country.
As Nigeria continues to operate a deregulated fuel market, petrol prices are likely to remain volatile and closely tied to global oil trends.