Dangote Petroleum CEO says fuel prices in Nigeria may stay high despite full refinery output, citing global oil market volatility and rising costs

David Bird, Managing Director and Chief Executive Officer of Dangote Petroleum Refinery, has explained that fuel prices in Nigeria are unlikely to fall despite the refinery operating at full capacity, citing extreme volatility in global oil markets.

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Bird spoke at a media chat on Monday, emphasising that the refinery is fully exposed to international commodity markets.

“We purchase, even under the Crude for Naira programme, Nigerian crude at international benchmark-related prices. We then pay international freight and insurance rates to bring that crude to the refinery,” he said.

He noted that Nigerian crude accounts for roughly 30 to 35 per cent of the refinery’s intake, with the remainder sourced on the open market in US dollars, often passing through multiple traders before reaching the plant, which adds further costs.

The refinery has processed a variety of crudes, including West Texas Intermediate and grades from South America, Central America, and West Africa.

Bird acknowledged the burden on consumers, saying the refinery is doing all it can to minimise supply chain costs.

“Brent crude, which was in the mid-$60 range a week ago, has climbed to $118. Freight costs have surged from about $800,000 to roughly $3.5 million per shipment,” Bird added.

Key points from the media session, shared by Dangote Group on its official X account, highlighted that the refinery’s exposure extends beyond crude prices to freight, insurance, and financing costs. Import-dependent countries are particularly affected by global oil market fluctuations.

Bird emphasised that domestic refining has provided Nigeria with supply security, ensuring fuel availability even during global disruptions.

He added that the refinery operates at its full nameplate capacity of approximately 650,000 barrels per day, with potential to scale to around 700,000 barrels per day.