… PETROAN tasks NNPC on domestic refining to curb global shocks
… Domestic refining won’t significantly lower petrol prices – CPPE
By Seun Ibiyemi
The Chief Executive Officer of Dangote Petroleum Refinery & Petrochemicals (DPRP), David Bird, has assured Nigerians that the refinery will continue to meet the country’s fuel demand despite the volatility in the global oil market triggered by tensions involving Iran, United States and Israel.
This is even as Dangote refinery raised the gantry price of Premium Motor Spirit to N1,175 per litre, marking the third upward adjustment within a week.
Bird gave the assurance during a media briefing in Lagos on Monday, where he reaffirmed the refinery’s commitment to maintaining stable fuel supply in the face of global supply disruptions.
Read also:Oil price imminent as Dangote refinery suspends petrol loading
According to him, domestic refining has become critical for Nigeria’s energy security, especially at a time when geopolitical tensions are affecting crude oil prices, freight costs and insurance rates across global markets.
“Dangote Refinery will continue to meet Nigeria’s fuel demand despite global supply disruptions and market volatility. Domestic refining gives Nigeria supply security, ensuring the country avoids fuel shortages and queues even when global markets are disrupted,” Bird said.
He noted that the refinery is prepared to compete in Nigeria’s petroleum market under import-parity pricing, provided regulators ensure fair competition for all players in the downstream sector.
Bird stressed that the refinery is willing to compete for market share as long as there is a level playing field, particularly regarding Euro 5 standard gasoline now being supplied to Nigerian consumers.
“We are willing to compete for import-parity pricing provided the regulator enforces a level-playing field for Euro 5 gasoline that Nigerians now enjoy. We are happy to compete,” he said.
The CEO also clarified that the refinery does not receive crude oil at discounted rates under the Federal Government’s crude-for-naira arrangement. Instead, he explained that the facility purchases Nigerian crude at prevailing international benchmark prices.
Bird added that the refinery’s operations are fully exposed to global commodity market dynamics, including crude oil price fluctuations, freight rates, insurance premiums and financing costs.
He disclosed that tanker freight costs have risen sharply in recent days, jumping from about $800,000 to roughly $3.5 million per shipment due to disruptions in international shipping routes.
“Global oil markets are experiencing extreme volatility, with crude prices rising from the mid-$60 range to nearly $120 per barrel within a week,” he said.
Despite the challenging market conditions, Bird said the refinery continues to operate at full capacity to ensure steady supply of petroleum products to the Nigerian market.
According to him, the refinery currently operates at its full nameplate capacity of about 650,000 barrels per day, with the potential to increase production to around 700,000 barrels per day.
Also, the refinery announced the price hike to marketers, raising the gantry price of Premium Motor Spirit to N1,175 per litre from N995 per litre announced on Friday, representing an increase of N180 or about 18.1 per cent within three days.
The latest revision marks the fourth consecutive price review in less than two weeks.
Dangote blamed the development on the cost of production and market volatility.
“Yes, the gantry prices have been adjusted. PMS is now N1,175 per litre while Automotive Gas Oil 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,” an official confirmed.
The development came after the refinery suspended petrol loading operations and restricted truck-out activities, which had fuelled speculation among market participants about an imminent price adjustment.
PETROAN tasks NNPC on domestic refining to curb global shocks
Meanwhile, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Nigerian National Petroleum Company Limited (NNPC Ltd.) to urgently strengthen domestic refining capacity.
This is to shield Nigeria from global petroleum market shocks.
Dr Billy Gillis-Harry, National President, PETROAN, on Monday called on the Group Chief Executive Officer, NNPC Ltd., Mr Bayo Ojulari, to facilitate the immediate commencement of production at Nigeria’s local refineries.
Gillis-Harry said that production at the refineries was paramount, particularly the Area five Plant at Port Harcourt Refinery and the Warri Refinery, which previously operated briefly before shutdown for profit index evaluation.
Read also:Iran-Us-Isreal crises: NNPCL raises petrol price to N960
He said that this had become imperative due to the ongoing conflict involving Israel, the United States and Iran, which was pushing global petroleum prices to alarming levels.
Projecting future trends, he warned that Premium Motor Spirit (PMS) could rise close to N2,000 per litre while Automotive Gas Oil (AGO), may approach N3,000 per litre if the situation persists.
He said that sustained drone and missile attacks now threatened critical oil routes and infrastructure, creating uncertainty in global supply chains.
“With no clear end to the conflict, petroleum product prices in both international and domestic markets are expected to rise sharply in the coming days.
“Before the crisis, PMS, known as fuel sold at N774 per litre but now sells above N1,000 per litre, representing an increase of about 30 per cent.
“Diesel, previously sold at N950 per litre but has risen to N1,400 per litre and above, an increase of about 49 per cent,” he said.
Gillis-Harry said that rehabilitating Nigeria’s refineries for immediate domestic production was critical.
On local refining, he said that it would reduce exposure to international market volatility, especially as Nigeria had abundant crude oil resources under the custody of NNPC Ltd.
He said that government-owned refineries were less vulnerable to global supply disruptions compared to privately owned refineries dependent on imported crude.
The PETROAN president said that continued fuel price increases would worsen inflation, cause job losses, deepen economic hardship, increase transportation costs, and raise prices of goods and services nationwide.
“Fuel remains essential for daily mobility, while diesel is vital for manufacturing and industrial operations,” he said.
He commended President Bola Tinubu for the ongoing bold policies to reform the oil and gas sector, and called on Tinubu to direct the immediate rehabilitation and commencement of production at the government-owned refineries.
According to him, this will ultimately bring relief to citizens and stimulate economic growth.
Domestic refining won’t significantly lower petrol prices – CPPE
Also, in a swift reaction the Centre for the Promotion of Private Enterprise (CPPE) warned that domestic refining alone may not significantly reduce petrol prices for Nigerians, especially as global crude oil prices surge above $100 per barrel.
The position was outlined in a policy brief shared with BusinessPointer on Monday by the Chief Executive Officer of CPPE, Dr. Muda Yusuf.
According to the think tank, while the growth of domestic refining capacity can improve supply stability, fuel prices in Nigeria will still be heavily influenced by global crude oil market dynamics.
The CPPE said there is a widespread belief that the emergence of domestic refineries should automatically translate into cheaper petrol prices. However, the group noted that the economics of refining mean local refineries remain exposed to international crude oil pricing.
“There is a widespread expectation that the presence of domestic refineries should automatically translate into significantly cheaper petroleum products. However, the economics of refining suggests otherwise,” Yusuf said.
“Crude oil feedstock for refineries is priced using international benchmark prices and denominated in U.S. dollars, irrespective of the location of the refinery.”
“Even crude supplied by local producers or the national oil company is priced using international crude oil benchmarks.”
“Domestic refineries also pay a premium of about $3–$6 per barrel in order to secure crude supply.”
Yusuf explained that because crude oil, the main feedstock for refineries is priced using global benchmarks, local refining operations cannot fully escape the impact of international price movements.
The CPPE further noted that even when crude oil transactions are conducted locally, the pricing mechanism still reflects global market values.
In some cases, crude supplied to domestic refineries may be settled in naira under special arrangements.
However, the underlying valuation of the crude is still based on the naira equivalent of global crude oil prices.
This means domestic refineries remain substantially exposed to fluctuations in international oil markets.
As a result, changes in global crude prices will continue to influence the cost of refined petroleum products in Nigeria.
According to the CPPE, domestic refining can improve product availability but cannot completely shield the domestic fuel market from global price volatility.
Despite these limitations, the CPPE noted that domestic refining still provides several economic advantages, particularly in terms of logistics and transportation costs.
Importing petroleum products involves expenses such as shipping, marine insurance, port handling, and demurrage.
Freight costs can rise significantly during periods of global supply disruption.
Refining crude locally reduces many of these logistics-related costs.
These savings can help moderate overall supply costs within the domestic market.
Yusuf noted that these cost advantages become more significant during global supply shocks when international freight and shipping costs typically surge.
