Petrol near N1,400 as Dangote defends price hikes

Dangote Petroleum Refinery defended its recent fuel price hikes, citing the cost of crude oil and the time-consuming process of securing, shipping, and delivering crude to the refinery. Premium Motor Spirit (petrol) prices increased to between N1,310 and N1,400 per litre across the country. In Lagos and Ogun states, petrol is now selling for about N1,310 per litre, while prices have risen to N1,350 or more in northern states and other locations farther from the refinery.

Dangote's latest price increase followed a N65 per litre raise in its PMS gantry price, from N1,200 to N1,265, effective August 29. This was the third increase announced by the refinery in just eight days. Despite global crude prices declining, the hike occurred during heightened tensions between the US and Iran. A senior Dangote executive explained that the international crude price cannot solely determine petrol production costs due to significant lag times between purchasing and receiving crude at the refinery.

Factors such as chartering a ship, signing charter party agreements, and sailing the ship to Nigeria also impact the timing of crude acquisition. The executive further questioned how the refinery would account for large volumes of expensive crude purchased earlier when prices were higher.

This explanation provides Dangote's defense against criticism that its petrol price increases have occurred despite a decline in international crude benchmarks. The refinery raised its gantry price by N100 per litre in eight days, representing an 8.6 percent increase. The latest increase moved the refinery's coastal PMS price from N1,582,380 to N1,669,545 per metric tonne.