According to executives at the Dangote Refinery, Nigeria’s fuel prices would likely remain high despite domestic refining, as global factors continue to shape the market.

In an interview with Arise Television, the refinery’s Managing Director, David Bird, indicated that the projected relief from domestic production has been undercut by foreign causes, particularly Middle Eastern tensions.

He stated that the refinery operates without subsidies and is completely exposed to global market realities, making fuel pricing susceptible to rising costs throughout the supply chain.

Bird observed that essential inputs such as crude oil, goods, and insurance are all influenced by global events. According to him, this makes it difficult to considerably lower petrol costs at the pumps.

“We try and maintain some stability within a commercially acceptable range, but all our cost inputs—from crude to freight and insurance—are impacted,” he said.

A market analysis revealed that, while crude oil prices fell earlier this week, petrol prices did not follow suit. Instead, the current rise is still in place.

Petrol prices in the country remain at over ₦1,300 per litre, following a roughly 20% increase last week.

‘Cost-of-living crisis’ heightens concerns
Bird highlighted the incident as part of a broader economic struggle for Nigerians.

“This is a cost-of-living crisis; every facet of the modern economy is impacted by energy,” he said.

He added that even if geopolitical tensions ease immediately, the effects on supply chains could linger for months, delaying any potential price relief.

Looking ahead, the refinery boss urged the government to take a broader view of the factors driving fuel costs, including the overall business environment.

“I think there’s an opportunity for the government to take an all-encompassing view, not just crude price, but the cost of doing business in Nigeria,” he stated.

He also stressed the need for long-term strategies, such as building strategic reserves, noting that past global disruptions like COVID-19 exposed vulnerabilities in supply systems.

Concerns over crude supply allocation

Bird also raised concerns about the crude allocation system in Nigeria, saying the refinery does not receive enough supply or its preferred grades.

He explained that while part of the refinery’s needs is met under the Crude-for-Naira arrangement, the company still relies heavily on imports.

“So, our request is, can we get more and can we be transparent on the allocation methodology?” he asked.

According to him, the refinery frequently purchases Nigerian crude on the international market in dollars, sometimes at a premium of more than $18 a barrel.

He said that growing freight and insurance expenses have raised the entire cost of production, leading to the country’s persistently high petrol prices.

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