Why we increased fuel price – Dangote Refinery breaks silence

The recent increase in fuel prices has sparked outrage across Nigeria, with both Dangote Refinery and the Petroleum Products Marketers Association of Nigeria (PETROAN) attributing the hike to a surge in global crude oil prices. As the new petrol prices take effect nationwide, Nigerians are voicing their concerns over the growing financial strain that the hike is expected to impose on already burdened households.

This latest price adjustment has led to significant changes at fuel stations across the country. On Friday, Nigerians woke up to a rise in the cost of Premium Motor Spirit (PMS), as both retail and ex-depot prices saw increases that reflect the global market’s influence on local fuel costs. The $20 billion Dangote Refinery, which has become a major player in Nigeria’s oil industry, raised its ex-depot price from N899.50 per litre to N950 per litre, marking a 5% hike. As a result, the retail price of petrol followed suit, climbing to between N970 and N1,150 per litre, depending on the region and the station.

Notably, stations directly supplied by Dangote Refinery, such as those operated by MRS, saw their petrol prices rise to N970 per litre from N935. Meanwhile, outlets of the Nigerian National Petroleum Company Limited (NNPCL) increased their price to N999 per litre, up from N965, with other filling stations nationwide now charging anywhere from N1,040 to N1,150 per litre.

Dangote Refinery and PETROAN Shift Blame to Global Crude Prices
In a statement addressing the price hike, Dangote Refinery, through its spokesperson Anthony Chijiena, cited the significant surge in global crude oil prices as the cause. According to the refinery, the rise in domestic petrol prices is a direct result of the increase in Brent crude’s price from $70 to $82 per barrel. This hike in global crude prices, Dangote explained, is an unavoidable factor that has led to higher production costs for petrol.

However, Dangote Refinery also highlighted that it has absorbed a substantial portion of the increased costs in an effort to cushion the impact on Nigerians. The refinery stated that while the ex-depot price of petrol has been raised by 5%, this increase is far lower than the 15% rise in global crude prices. According to Dangote, if they had passed on the full increase to the market, retail prices could have risen to between N1,150 and N1,200 per litre, instead of the current price of N970.

“We wish to clarify that the recent adjustment in our ex-depot price of Premium Motor Spirit (Petrol) is directly related to the significant increase in global crude oil prices,” Dangote Refinery said. “As crude remains the primary input in the production of PMS, any fluctuation in its international price inevitably impacts the cost of the finished product.”

The refinery further emphasized its commitment to maintaining affordable fuel for Nigerians, noting that it has absorbed approximately 50% of the cost increases from the international oil market. Dangote also highlighted that it has worked with its partners, including Ardova, Heyden, and MRS Holdings, to ensure that the retail price remains at N970 per litre nationwide, despite the rising logistics and production costs.

Meanwhile, PETROAN, in a statement from its spokesperson Joseph Obele, echoed Dangote’s sentiments, stressing that global crude oil price increases are the root cause of the price hike. Quoting PETROAN’s National President Billy Gillis-Harry, the association insisted that the price adjustments were beyond the control of local marketers. “Our selling rate always reflects our buying rate,” Gillis-Harry explained. “Our members shouldn’t be blamed for the current increase; it’s an external factor.”

Nigerians Express Growing Frustration
The price hike has fueled widespread anger and frustration among Nigerians, many of whom already struggle with the high cost of living. Fuel prices are a key determinant of transportation costs, and with this latest rise, the prices of food and other essential goods are expected to climb as well.

Prof. Theophilus Ndubuaku, Deputy President of the Nigeria Labour Congress Political Commission, expressed concern that the fuel price increase would further burden Nigerians who are already grappling with rising inflation and the devaluation of the naira. “This pump price hike will not only affect foodstuff and fares,” he said. “There is also the problem of inflation and the value of the naira to contend with.”

Suleiman Abubakar, a resident of Abuja, also shared his worries, stating that the coming months would be even harder for Nigerians due to the compounded effects of the fuel price hike. “The coming days will be difficult for Nigerians. With the latest fuel hike, food items and transportation are bound to increase. It is painful that Dangote and petrol marketers are blaming crude oil prices, leaving Nigerians to contend with their fate,” he lamented.