Despite the commencement of domestic refining, petrol prices in Nigeria are expected to remain elevated due to persistent global and structural pressures. Management of the Dangote Refinery has explained that the anticipated relief from local production is being constrained by external market forces, particularly geopolitical tensions in major oil-producing regions like the Middle East.
Speaking in an interview, the refinery’s Managing Director, David Bird, noted that fuel pricing is heavily influenced by international dynamics. According to him, the refinery operates without subsidies and is fully exposed to fluctuations in global crude oil prices, freight costs, and insurance rates. These variables continue to drive up the overall cost of refined products.
A recent market survey shows that petrol prices have not responded to the recent dip in crude oil prices, even though increases are quickly reflected at the pump whenever global prices rise. Currently, petrol sells at an average of about N1,300 per litre nationwide, following a roughly 20% increase recorded last week.
Bird described the situation as part of a broader cost-of-living crisis, emphasizing that energy prices have a cascading effect across all sectors of the economy. He warned that even if global conflicts were resolved immediately, supply chain disruptions would likely persist for several months, delaying any meaningful reduction in fuel prices.
He also called on the government to adopt a more comprehensive approach to addressing the issue, focusing not only on crude prices but also on the broader cost of doing business in Nigeria. He stressed the need for long-term strategies such as building strategic reserves to cushion against future shocks.
In addition, Bird raised concerns about the crude oil allocation system in Nigeria. He disclosed that the refinery often does not receive sufficient volumes or preferred grades of locally produced crude, forcing it to source from the international market at higher costs. Under the existing framework, only about 30–35% of its crude needs are met through the “Crude for Naira” arrangement, and even then, pricing remains at international benchmarks.
As a result, the refinery frequently pays premiums exceeding $18 per barrel for Nigerian crude abroad, alongside high freight and insurance costs. These combined factors continue to limit the potential for lower petrol prices in the near term.
