“Nigerians Should Brace For Continued Rise Petrol Costs”- Dangote

• Nigeria’s petrol prices are expected to stay high despite local refining efforts.
• International market pressures are significantly influencing fuel costs.
• David Bird, Managing Director of Dangote Refinery, highlighted that global developments are a key factor.

Nigeria’s petrol prices are expected to remain elevated even with local refining efforts, as international market pressures continue to influence costs, officials at the Dangote Refinery have warned.

In an interview with Arise Television, the refinery’s Managing Director, David Bird, explained that the anticipated relief from domestic fuel production has been dampened by global developments, particularly tensions in the Middle East.

Bird emphasized that the refinery operates without government subsidies, leaving it fully exposed to global market fluctuations. This makes petrol pricing highly sensitive to rising costs across the supply chain.

“Every element of our cost from crude oil to freight and insurance is affected by global conditions,” he said. “We try to maintain some stability within a commercially acceptable range, but it’s a constant challenge.”

A recent market survey indicated that although crude oil prices dipped earlier in the week, petrol prices did not follow suit, with the recent increases remaining in effect. Across Nigeria, petrol is now selling at an average of around ₦1,300 per litre, following nearly a 20 percent jump last week.

Bird described the situation as part of broader economic pressures affecting Nigerians. “This is essentially a cost-of-living crisis; energy impacts almost every aspect of the modern economy,” he said.

He also warned that even if geopolitical tensions were to ease immediately, disruptions in supply chains could persist for months, delaying any significant reduction in pump prices.

Looking ahead, Bird called on the government to consider a wider range of factors influencing fuel costs, including the overall business environment. “The government has an opportunity to take a comprehensive view, not just focusing on crude prices but also on the cost of doing business in Nigeria,” he said.

He highlighted the importance of long-term measures, such as building strategic reserves, noting that past global disruptions like the COVID-19 pandemic exposed weaknesses in supply systems.

Bird also raised concerns about Nigeria’s crude allocation system, stating that the refinery often receives insufficient supplies or grades that are not ideal for its operations. While some crude is provided under the Crude-for-Naira arrangement, the refinery still relies heavily on imports.

“Our request is to increase supply and ensure transparency in allocation,” he said. According to Bird, the refinery sometimes ends up buying Nigerian crude from the international market in dollars, occasionally paying a premium of over $18 per barrel.

Rising freight and insurance costs have further added to production expenses, contributing to the sustained high petrol prices nationwide.