Officer of Dangote Petroleum Refinery, David Bird, has explained why petrol prices in Nigeria may not decline significantly despite the refinery operating at full capacity.
Speaking during a media chat on Monday, Bird stated that the refinery remains fully exposed to fluctuations in the global oil market. According to him, this reality means that local fuel prices are influenced by international crude oil pricing and related costs.
Bird explained that even under Nigeria’s Crude-for-Naira arrangement, the refinery still purchases crude oil from the Government of Nigeria at prices tied to international benchmarks rather than discounted domestic rates.
“We are fully exposed to the international commodity market, and this is something that needs to be widely understood,” he said. “Even under the Crude-for-Naira programme, we purchase Nigerian crude at international benchmark-related prices.”
He further noted that the refinery also incurs global freight and insurance costs to transport crude oil from export terminals to its facility. These additional expenses, he said, contribute to the overall cost of refining petroleum products.
According to Bird, crude sourced from Nigeria represents only about 30 to 35 percent of the refinery’s total intake. The remaining supply is purchased from international markets and paid for in US dollars.
The CEO added that crude obtained through international markets often passes through several traders before reaching the refinery, which further increases costs due to added premiums and intermediary charges.
Bird revealed that the refinery processes a diverse range of crude oil types. These include West Texas Intermediate as well as other grades sourced from regions such as South America, Central America and West Africa.
He acknowledged that the current market conditions are placing financial pressure on consumers, particularly in countries heavily dependent on imported or internationally priced crude oil.
Despite these challenges, Bird said the refinery is working to streamline its operations and reduce costs across its supply chain where possible.
The refinery, one of the largest single-train refineries in the world, has been widely viewed as a key project expected to boost domestic fuel production and reduce Nigeria’s reliance on imported petroleum products.
However, industry observers say global oil price volatility continues to play a major role in determining the final cost of refined fuel products in the country.
