High petrol prices persist despite Dangote refining, says management

Domestic refining capacity has not translated into lower petrol prices because the Dangote Refinery remains fully exposed to volatile global markets and faces constraints in securing local crude, its management has said.

In an interview with Arise Television, the refinery’s Managing Director, David Bird, explained that every input cost, crude oil, freight, and insurance is determined by international prices. He noted that geopolitical tensions, particularly in the Middle East, have kept costs elevated.

“We try to maintain some stability within a commercially acceptable range, but all our cost inputs are impacted,” Bird said.

A survey by *Vanguard* on Wednesday showed that pump prices across Nigeria have held at an average of N1,300 per litre, following a nearly 20 per cent increase last week. A dip in global crude prices earlier in the week has not reflected at the pump.

Bird described the situation as part of a broader cost-of-living crisis, adding that even an immediate end to global conflicts would not quickly ease supply chain pressures.

He also called on the government to take a broader view of the industry’s challenges. “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 said.

A key concern raised by Bird is the crude allocation system under the Naira-for-Crude programme. He said the refinery often does not receive the Nigerian crude grades it requests or the full volumes it needs. As a result, it is forced to buy the same grades on the international market at significant premiums.

“We’re paying over $18 a barrel premium for those same Nigerian crude grades,” Bird said. He added that while 30 to 35 per cent of the refinery’s crude comes through the Naira-for-Crude arrangement, the rest is sourced internationally at prevailing market rates, with additional freight and insurance costs.

Bird called for transparency in the allocation process, stating that clearer methodology would help the refinery run more efficiently and reduce reliance on costly international spot markets.