Petrol prices in Nigeria are expected to remain high, despite the increase in local refining, according to officials at Dangote Refinery.
Speaking with Arise Television, Managing Director David Bird explained that while domestic production is improving, global market pressures especially tensions in the Middle East are limiting any immediate relief for consumers.
Global Factors Affect Fuel Costs
Bird said the refinery operates without subsidies, making it fully exposed to international market conditions. Costs such as crude oil, shipping, and insurance are all influenced by global developments, which in turn affect pump prices.
“We try to maintain price stability within a commercially acceptable range, but all our cost inputs from crude to freight and insurance are impacted,” he said.
Recent trends show that even though crude oil prices have fallen slightly, petrol prices at the pump remain around ₦1,300 per litre following a nearly 20% increase last week.
Impact on Nigerians
Bird described the situation as part of a broader economic challenge.
“This is a cost-of-living issue; energy prices affect nearly every aspect of the economy,” he said.
He warned that even if international tensions ease, disruptions in the supply chain could persist for months, delaying any reduction in petrol prices.
Call for Strategic Planning
Bird encouraged the government to adopt a more comprehensive approach to managing fuel costs, considering the overall business environment and not just crude prices.
“There’s an opportunity for the government to take an all-encompassing view, not just crude price, but the cost of doing business in Nigeria,” he said.
He also recommended building strategic reserves to protect against future global disruptions, citing lessons from past crises like COVID-19.
Concerns Over Crude Allocation
Bird added that the refinery does not always receive sufficient supply or preferred crude grades. While some crude is provided under the Crude-for-Naira scheme, the refinery often buys additional Nigerian crude on the international market at a premium. Rising shipping and insurance costs further contribute to sustained high petrol prices.
