Nigeria’s largest private refinery, the Dangote Petroleum Refinery, has assured Nigerians that there will be enough fuel in the country despite the ongoing crisis in the Middle East affecting global oil supply.
In a statement released on Thursday, the company said it will focus on supplying petrol and other refined products to the Nigerian market first.
It explained that this step will help protect the country from global fuel shortages caused by the conflict in the Middle East.
The refinery said the crisis has forced some refineries in other countries to shut down, reducing the amount of fuel available worldwide.
It added that China has also stopped exporting petrol and diesel, which has increased pressure on the global fuel supply.
According to the company, having a large refinery in Nigeria helps the country avoid the full impact of international disruptions because more fuel can now be refined locally instead of relying on imports.
The refinery noted that global oil prices have increased sharply due to the crisis. It said the price of Brent crude has risen by about 26 per cent to more than $84 per barrel.
Because of these rising costs, the company increased its petrol price at the depot by N100 per litre, which is about a 12 per cent rise. However, it said it absorbed about 20 per cent of the additional cost to reduce the burden on consumers.
The refinery explained that it buys crude oil at international market prices, whether the supply comes from Nigeria or other countries.
Nigerian crude is usually priced between $3 and $6 above the Brent benchmark, while shipping costs add about $3.50 per barrel.
As a result, crude oil now reaches the refinery at between $88 and $91 per barrel. Previously, the cost was around $68 per barrel when petrol was sold at N774 per litre.
The company also said it receives about five cargoes of crude oil every month from the Nigerian National Petroleum Company Limited, which are paid for in naira. However, the refinery needs about 13 cargoes monthly to meet Nigeria’s fuel demand.
“This is one of the many benefits of domestic refining,” the company stated, adding that large-scale local refining significantly reduces the country’s vulnerability to international supply disruptions,” it added.
Because of the shortfall, it has to buy additional crude oil from international traders using foreign exchange.
Despite these challenges, the refinery said large-scale local refining will help reduce Nigeria’s dependence on imports and protect the country from severe fuel shortages during global crises.
The company also revealed plans to improve fuel distribution across the country by introducing trucks powered by compressed natural gas (CNG).
It said the rollout of the CNG trucks will begin this month to speed up delivery and reduce transport costs.
