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Experts in Nigeria’s downstream petroleum sector have defended the pricing structure of the Dangote Refinery, accusing some fuel companies of trying to squeeze the refinery and misleading the public about the recent increase in petrol prices.
Experts say that reports suggesting that the latest adjustments made by the refinery are solely responsible for the recent increase in fuel prices are misleading, noting that importers are also bringing in petrol at nearly N1,000 per litre, while the refinery price in coastal areas is N948 and the gantry or ex-depot price is at N995 per litre.
They emphasize that public comparisons fail to take into account differences in price structures and supply channels.
According to experts, N948 per liter represents the coastal shipping price, which refers to petroleum products transported by ships or barges from refineries to depots along the coastline. On the other hand, N995 per liter represents the gantry or ex-depo price, which is the rate paid by marketers who load petrol directly from the refinery into tank trucks at the loading gantry for onward distribution throughout the country.
Experts explain that the two figures should not be interpreted as conflicting prices, but rather as differences in logistical arrangements in the petroleum distribution chain.
Talking to our correspondent on Sunday, energy expert David Okon said price adjustments were inevitable given the prevailing market conditions.
According to him, Dangote Petroleum Refinery & Petrochemicals operates in a deregulated market and purchases crude oil at international prices, which have risen sharply due to geopolitical tensions in the Middle East.
“The refinery has already borne some of the costs to cushion the impact of the crisis on the Nigerian people. We can see what is happening in other parts of the world where shortages and shortages are being reported despite rising prices, but the Dangote Refinery continues to guarantee domestic supply,” he said.
READ ALSO: Experts praise Dangote, accuse marketers of blackmail plot amid Middle East crisis
Okon explained that while the refinery previously sold petrol at N774 per litre, the price of crude oil stood at around $68 per barrel. However, with crude oil prices now at around $95 per barrel, a cost difference of around $27 per barrel translates to almost N40,000 per barrel when converted to Naira.
“You cannot expect refineries to continue selling at the old prices in these conditions,” he added.
“If imported products are really cheaper, importers will continue to sell at previous prices.”
He warned that without local refining capacity, Nigeria could face severe fuel shortages, long queues at filling stations and a resurgence in black market sales.
“Without the Dangote Refinery, many fuel stations would likely close, queues would once again occur across the country and black market traders would take advantage of the situation, peddling four liter kegs for N20,000 or more. The refinery has effectively prevented such a scenario,” he said.
Another analyst, Mohammed Ibrahim, also blamed the narrative circulating in some quarters that refinery price adjustments were responsible for worsening economic difficulties in the country.
Accusing some importers of trying to manipulate public perception, he said, “What we are seeing is nothing but deliberate blackmail by some fuel importers who feel threatened by local refiners.
“They distorted the price structure to mislead Nigerians and create unnecessary panic in the market.
“By overstating refinery fuel prices and ignoring the comparable prices of imported fuel, they are trying to make it seem like the Dangote Refinery is the cause of rising prices and economic hardship. This is a calculated effort to protect their import business and weaken local refineries, intended to reduce our dependence on imported gasoline.”
Ibrahim added that such narratives aim to portray the refinery as the reason Nigerians are struggling with higher fuel prices.
He emphasized that fuel prices in Nigeria are largely influenced by global crude oil prices, exchange rate fluctuations, and distribution logistics, and noted that these factors affect both locally refined and imported fuels in the country’s deregulated market.
Afolabi Olowookere, Managing Director and Chief Economist at Analysts’ Data Services and Resources (ADSR) Limited, explained that although Nigerians expect refined products from refineries to be much cheaper, prevailing market realities such as global crude oil prices, crude oil supply costs and refining margins make major price reductions unlikely in the short term.
“Therefore, increasing domestic crude oil allocation to refineries will strengthen supply stability and increase the long-term benefits of local refining to the economy,” Olowookere said.
Recent conflicts in the Middle East and disruptions along major shipping lanes have tightened global oil supplies, pushing crude oil prices past $90 a barrel, a development that has directly increased the price of imported and locally refined gasoline in Nigeria.
The unrest has increased fuel and transportation costs in several countries, including Ghana, the United States, the United Kingdom, South Africa, India, Canada, Brazil, Germany, France, and Japan, as rising crude oil prices increase refining, distribution, and logistics costs globally.
By: Babajide Okeowo
