The Chief Executive Officer of Dangote Petroleum Refinery, David Bird, has explained that the 650,000-barrel-per-day refinery does not receive crude oil at discounted rates despite the Federal Government’s naira-for-crude arrangement.
Bird disclosed this during a media chat on Monday, which was later shared on the company’s official X (formerly Twitter) account.
He spoke while defending the refinery’s recent increase in petrol price at the gantry by ₦396 per litre, from ₦799 to ₦1,175, following the escalation of tensions involving Iran, the United States and Israel.
According to Bird, the refinery’s pricing is largely influenced by international commodity markets, including global crude oil prices, freight charges, insurance, and financing costs. These factors, he said, have contributed to the recent rise in petrol prices amid the ongoing volatility in the global oil market.
He added that countries that rely heavily on imported fuel, such as Nigeria, are often the most affected during global oil market disruptions.
Dangote Refinery highlighted several points from the media briefing, stating:
“Key talking points from a media chat with the managing director/CEO of Dangote Petroleum Refinery, David Bird
“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.
“Even under the crude-for-naira arrangement, Nigerian crude is purchased at international benchmark prices, meaning the refinery does not receive discounted crude.
“Import-dependent countries are worst hit as the global oil crisis escalates.
“Global oil markets are experiencing extreme volatility, with crude prices rising from the mid-$60 range to nearly $120 per barrel within a week.
“The refinery is fully exposed to international commodity markets, including crude oil prices, freight rates, insurance, and financing costs.
“Freight costs have surged dramatically, with tanker costs rising from about $800,000 to roughly $3.5 million per shipment in the current market environment.
“Dangote Refinery 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.”
The naira-for-crude policy began in 2024, allowing the Nigerian National Petroleum Company Limited (NNPCL) to supply crude oil to the Dangote Refinery in naira.
Despite this arrangement, QuickTake reported that the refinery has increased its gantry price at least three times within a week, with petrol selling at ₦1,175 per litre as of Monday evening.
Meanwhile, many Nigerians have continued to express concerns over the rising cost of petrol, which has climbed above ₦1,000 per litre despite the establishment of the Dangote Refinery and the implementation of the naira-for-crude policy by the Federal Government.