Why Dangote Refinery Increased Petrol Prices: An In-Depth Look

Discover why Dangote Refinery recently increased petrol prices. Learn about the factors influencing the adjustment, including global crude oil prices, and the measures taken to ensure affordability.

Dangote Refinery Explains Petrol Price Adjustment

The Dangote Petrochemical Refinery has clarified the reasons behind its recent hike in the price of Premium Motor Spirit (PMS), commonly referred to as petrol. This adjustment, which raised the ex-depot price from ₦899 to ₦955 per litre, is linked to the rising cost of global crude oil.

In a statement released on its official X account on Sunday, January 19, 2025, the refinery detailed the factors contributing to the price increase while emphasizing its commitment to ensuring affordability for Nigerians.

Factors Behind the Price Increase

The statement highlighted that the adjustment was necessitated by a 15% rise in global crude oil prices, from $70 to $82 per barrel. As crude oil remains the primary input for producing PMS, fluctuations in its international price directly affect production costs.

Additionally, the premium for Nigerian crude, which is approximately $3 per barrel, has further influenced the pricing. Despite these challenges, Dangote Refinery increased its ex-depot price by only 5%, reflecting a commitment to minimizing the impact on consumers.

Retail Pricing and National Distribution

To ensure consistent pricing nationwide, including in the Federal Capital Territory (FCT), Dangote Refinery’s partners—Ardova, Heyden, and MRS Holdings—will retail petrol at ₦970 per litre. The refinery has also absorbed increased logistics costs to make this possible.

“If the entire increase in crude oil prices were passed on to the market, PMS would retail at approximately ₦1,150 to ₦1,200 per litre in some locations,” the statement revealed. However, the current price of ₦970 per litre reflects the refinery’s effort to shield consumers from the full brunt of global price volatility.

Commitment to Nigerians

Dangote Refinery reiterated its dedication to providing affordable and high-quality petrol while contributing to Nigeria’s economic self-sufficiency. The refinery has absorbed approximately 50% of the cost increases in the international oil market to protect Nigerians from undue hardship.

The statement concluded:

“In these challenging times, we continue to prioritize the best interests of Nigerians, striving to shield consumers from the full impact of global price volatility while adapting to evolving market conditions.”

Conclusion

The recent petrol price adjustment by Dangote Refinery underscores the impact of global crude oil price fluctuations on local markets. However, the refinery remains committed to ensuring affordability and reliability, absorbing significant costs to minimize the burden on Nigerians.

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