Dangote Petroleum Refinery raised its petrol gantry price to N1,175 per litre on Monday — the third upward adjustment in eight days and a cumulative 52 percent increase from the N774 per litre the refinery charged before the US-Israel war against Iran began — pushing retail pump prices in several Nigerian states past N1,200 per litre and threatening a fresh wave of transport fare hikes, food price inflation, and production cost increases across Africa’s most populous economy.
The adjustment, communicated to marketers and depot operators on Monday, moved the ex-depot rate of Premium Motor Spirit from N995 per litre — set on Friday — to N1,175, an increase of N180 or 18.1 percent in three days. The refinery also revised its Automotive Gas Oil gantry price to N1,620 per litre. A senior refinery official confirmed the adjustment on condition of anonymity, telling The Punch: “Yes, the gantry prices have been adjusted. PMS is now N1,175 per litre while AGO is N1,620 per litre. The market has been extremely volatile, and replacement costs have shifted significantly in recent days. These adjustments reflect prevailing market fundamentals and the cost environment we are currently operating in.”
The pricing sequence since the war began on February 28 traced the full arc of the global energy shock hitting Nigeria’s downstream sector in compressed form. The first increase raised the gantry rate from N774 to N875 per litre, a jump attributed to volatility in global crude oil prices after international benchmarks crossed the $80 per barrel threshold overnight.
The second adjustment pushed the gantry rate to N995, a sharp N221 jump in just four days, as Brent crude surged toward $93 per barrel amid the Strait of Hormuz closure. Monday’s third increase to N1,175 arrived as Brent futures crossed $107 per barrel in early Asian trading, with oil analysts at J.P. Morgan and Goldman Sachs warning that all Gulf energy exports could shut down within weeks if the war continued.
The structural problem driving the repeated price hikes was revealed in a detailed disclosure by the refinery this week: it receives only five crude oil cargoes per month from the Nigerian National Petroleum Company Limited under the naira-for-crude policy, well below the 13 cargoes it requires to sustain full domestic supply. The shortfall forces Africa’s largest refinery to source the remaining crude at full international market rates, using foreign exchange procured at open market prices.
“Nigerian crude oil is more expensive than the Brent benchmark price by $3 to $6 per barrel. After adding freight of $3.50 per barrel, crude oil lands in our tanks at between $88 and $91 per barrel,” the refinery stated. That compares with a $68 per barrel landing cost when its gantry price was N774 per litre — illustrating how sharply the refinery’s input costs have moved in a single week.
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The Federal Government, through NNPC Limited, has begun moves to secure crude oil supply for the refinery through third-party international traders in an attempt to stabilise domestic refining operations. A senior NNPC official told The Punch: “Leveraging our global crude trading network, we are sourcing third-party crude for the refinery at prices that are competitive with prevailing international market rates. As the national oil company entrusted with safeguarding Nigeria’s energy security, NNPC Limited remains fully committed to supporting domestic refining, including the Dangote Petroleum Refinery.” Officials warned, however, that the intervention would not immediately reduce pump prices for consumers.
The refinery publicly accused Nigerian upstream oil producers of failing to supply crude as required under the Petroleum Industry Act, forcing it to depend on international traders who charge additional premiums on top of already elevated global prices.
“The high crude cost is compounded by the fact that Nigeria upstream producers have failed to supply crude oil to the refinery as required under the PIA, forcing us to source a substantial portion through international traders who charge an additional premium,” the refinery stated. It added that selling fuel below production cost would undermine its ability to procure crude and sustain supply.
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Restrictions on petrol import licences have reinforced the refinery’s dominant market position throughout the crisis. Petroleumprice.ng chief executive Jeremiah Olatide said approximately 90 percent of marketers who applied for Premium Motor Spirit import permits this year were denied approval, effectively concentrating the domestic fuel market around a single supplier at the precise moment when that supplier’s input costs were rising fastest. Energy analyst Austin Avuru told BusinessDay that restoring the balance between local refining and imports — at a ratio of roughly 75 to 80 percent domestic to 20 to 25 percent imported — was necessary to introduce competitive pricing pressure.
“Imports should not exceed about 20 to 25 per cent of total supply while the rest is refined locally. That balance would strengthen the economy and improve energy security,” Olatide said.
J.P. Morgan Chase has projected that Brent crude could climb to $120 per barrel if a prolonged Middle East conflict continues to disrupt oil flows through the strait, noting that Gulf producers could maintain normal output for only about 25 days before storage facilities reach capacity. If that projection materialises, fuel analysts estimated Nigeria’s pump price could reach N1,500 per litre before the end of March — a level that would represent a near-doubling of prices within a month and that independent economists said would add between three and five percentage points to Nigeria’s already elevated inflation rate.
Transport workers and commercial operators across the country began announcing fresh fare adjustments on Monday. The National Union of Road Transport Workers said it was consulting members over a new nationwide fare schedule, with preliminary discussions pointing to increases of between 25 and 40 percent across major routes. Food vendors in Lagos and Abuja said logistics costs had already risen sharply over the past week, with the cost of moving goods from wholesale markets to retail points increasing by an estimated 30 percent since February 28. The Manufacturers Association of Nigeria said it was conducting an emergency survey of member companies to quantify the combined impact of higher diesel and petrol costs on production.
Meanwhile, the Dangote Petroleum Refinery said it was accelerating the deployment of Compressed Natural Gas-powered trucks to improve distribution efficiency and partially offset rising logistics costs for its downstream supply chain — a measure the company said would help reduce delivery costs and shorten supply timelines for retail markets across Nigeria’s downstream sector. No timeline was provided for when the NNPC’s third-party crude supply intervention would translate into relief at the pump.