Dangote Refinery keeps fuel prices stable despite rising global costs
Dangote Petroleum Refinery & Petrochemicals has kept domestic fuel prices steady despite rising international gasoline prices and higher freight costs, according to an S&P Global Commodity Insights report. Market participants told the agency that Dangote’s pricing effectively caps gasoline prices in Nigeria, making it difficult for importers to pass on higher international costs to local consumers. Freight costs for clean petroleum products from Northwest Europe to West Africa rose from US$29.70 per metric tonne at the end of June to US$37.12, while diesel markets tightened due to reduced Russian Black Sea cargoes, pushing up high‑sulphur gasoil prices across West Africa.
Since the end of May, the refinery has cut the ex‑depot price of Premium Motor Spirit by more than ₦200 per litre, Automotive Gas Oil by ₦300 per litre and Jet A1 aviation fuel by ₦520 per litre. Dangote says its pricing reflects crude oil bought weeks or months ahead under monthly‑average contracts, not daily spot moves. Recently the refinery switched from naira‑denominated pricing to a dollar‑based framework: petrol is now sold at $0.779 per litre, which at the official rate of ₦1,380.50 to $1 equals about ₦1,075.61 per litre, meaning the naira price will now fluctuate with the foreign‑exchange market.
The S&P assessment warns that without Dangote’s domestic supply Nigeria would likely face much higher pump prices as importers wrestle with rising product and shipping costs. Some stakeholders have renewed calls for the revival of government‑owned refineries to boost competition, expand local refining capacity and lessen the country’s exposure to FX volatility.
With fuel prices now tied to the dollar, will you adjust your household budget for possible FX‑driven price swings, or support efforts to revive government refineries to stabilize supply and costs?