A senior management official of the Dangote Group has disclosed that the Dangote Petroleum Refinery has been absorbing part of the cost of petrol and diesel sold in Nigeria, amid rising global oil prices triggered by tensions in the Middle East.
The official, who spoke on condition of anonymity, said the refinery’s current ex-depot price of about N1,200 per litre for petrol remains below prevailing market realities, given the sharp increase in crude oil prices following the escalation of conflict involving the United States and Iran, which reportedly disrupted supply routes through the Strait of Hormuz.
According to reports, Brent crude rose from about $66 per barrel on February 28 to over $100 per barrel after the disruption.
The official also confirmed that the refinery adjusted its petrol gantry price from N774 to N1,200 per litre in response to the global oil shock, with diesel and aviation fuel prices also affected.
The impact has been especially severe in the aviation sector, where airlines are reportedly considering operational shutdowns following a sharp rise in Jet A-1 fuel prices of over 350 percent.
The Airline Operators of Nigeria has raised concerns over the development. Its Vice President, Allen Onyema, recently noted that aviation fuel prices surged from about N900 per litre before the crisis to between N2,700 and N2,900, with some marketers selling as high as N3,500 per litre.
The Dangote refinery official said the $20 billion facility has managed to partially cushion fuel prices for petrol and diesel but cannot extend the same level of support to aviation fuel due to cost pressures.
The refinery is currently responsible for supplying a significant share of Nigeria’s domestic fuel demand, including over 90 percent of aviation fuel needs, according to industry figures.