Middle East Crisis: We’ll Ensure There Is No Fuel Scarcity In Nigeria, Says Dangote Refinery

Nigeria’s largest privately owned refinery, the Dangote Petroleum Refinery, has reassured Nigerians that it will prioritise domestic supply to prevent fuel scarcity in the country despite the ongoing crisis in the Middle East and the resulting volatility in the global oil market.

In a statement on Thursday, the refinery said it remains committed to serving as a stabilising force for Nigeria’s energy market amid global supply disruptions triggered by the conflict in the Middle East.

According to the company, the crisis has forced the shutdown of some refineries and reduced refining output across several countries, leading to tightening global supply of petroleum products.

It also noted that China has banned the export of gasoline and diesel, a development that has further strained international supply chains.

The refinery said it would ensure Nigeria is insulated from these shocks by prioritising the supply of refined petroleum products to the domestic market.

“This is one of the many benefits of domestic refining,” the company stated, adding that large-scale local refining significantly reduces the country’s vulnerability to international supply disruptions.

The statement noted that the conflict has pushed global crude oil and freight prices sharply higher, with the benchmark Brent Crude rising by about 26 per cent within a short period to above $84 per barrel.

In response to the surge in costs, the refinery said it implemented a measured adjustment of N100 per litre in its ex-depot price of Premium Motor Spirit (PMS), representing an increase of about 12 per cent.

However, it said the company had absorbed about 20 per cent of the cost escalation in order to cushion the impact on the domestic market.

The refinery explained that it continues to source crude oil at prevailing international market prices, whether purchased locally or from foreign suppliers. It added that Nigerian crude oil is typically priced between $3 and $6 per barrel above the Brent benchmark, while freight costs add about $3.50 per barrel.

“As a result, crude oil is currently landing in our tanks at between $88 and $91 per barrel,” the statement said, noting that crude previously landed at about $68 per barrel when its ex-depot price stood at N774 per litre.

The company further disclosed that while it receives about five crude cargoes monthly from the Nigerian National Petroleum Company Limited, paid for in naira, the volume falls short of the 13 cargoes required each month to meet local demand.

It said the shortfall has forced the refinery to source additional crude from international traders using foreign exchange obtained at open market rates.

The refinery also blamed upstream producers for failing to supply crude oil in line with provisions of the Petroleum Industry Act, which has compelled it to rely heavily on international traders who charge additional premiums.

Despite the challenges, the company maintained that local refining on the scale it operates continues to reduce Nigeria’s exposure to global supply disruptions, moderate foreign exchange demand and help prevent severe shortages during periods of international instability.

It added that it is accelerating the deployment of Compressed Natural Gas-powered trucks to improve nationwide distribution of petroleum products, reduce logistics costs and enhance delivery timelines across the downstream sector.

According to the refinery, the rollout of the CNG-powered trucks is scheduled to commence this month.

Dangote Refinery reaffirmed its commitment to transparency, operational excellence and the long-term objective of ensuring sustainable energy security and stability for Nigeria at an affordable cost.