DANGOTE Petroleum Refinery & Petrochemicals has clarified the volume of crude oil it receives from the Nigerian National Petroleum Company Limited (NNPCL) under the naira-for-crude arrangement, stating that the refinery currently gets five cargoes of crude oil monthly which are paid for in naira.
The refinery, however, explained that the supply is far below its operational requirement, noting that about 13 cargoes are needed each month to adequately meet domestic fuel demand.
The clarification followed the recent increase in the refinery’s pump price, a development that sparked public debate over the effectiveness of the naira-for-crude programme and whether it should shield Nigeria from international price shocks.
On Monday, Dangote Refinery raised its ex-depot price of Premium Motor Spirit (PMS) by N100 per litre, moving from N774 to N874. The adjustment quickly reflected across filling stations nationwide, pushing up retail prices.
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The price hike triggered calls from some industry analysts for greater transparency around the naira-for-crude scheme, with many arguing that the programme should reduce Nigeria’s vulnerability to global oil price volatility, particularly with increased local refining capacity.
“Dangote gets some crude from domestic supply – from the crude-for-naira arrangement with the NNPC. Why is the company suddenly increasing its gantry price even when the price of Nigerian Bonny Light hasn’t increased dramatically?” asked an oil and gas expert, who spoke on the condition of anonymity.
Responding to the concerns in a statement on Thursday, the refinery said the eight-cargo gap between what it receives from NNPC and what it requires is filled through purchases from other sources, including international suppliers.
It added that crude supplied by NNPC is not discounted, as the cargoes are priced at prevailing international market rates with an added premium.
According to the company, the limited supply means it must source additional crude from both domestic and foreign traders, requiring the refinery to obtain foreign exchange (FX) at open market rates to complete the transactions.
Dangote Refinery further stated that despite increasing its ex-depot petrol price by N100 per litre, the company absorbs about 20 percent of the surge in production costs in an effort to cushion the impact on consumers.
The refinery said the adjustment represents roughly a 12 percent increase and was largely driven by rising global crude prices and higher freight costs linked to the ongoing conflict in the Middle East.
It explained that benchmark Brent crude rose by about 26 percent within a short period, crossing the $84 per barrel mark.
The company added that Nigerian crude currently trades at a premium of between $3 and $6 above the Brent benchmark. When freight charges of about $3.50 per barrel are included, crude oil delivered to the refinery now costs between $88 and $91 per barrel.
By comparison, crude previously landed at about $68 per barrel when the refinery’s ex-depot petrol price stood at N774 per litre.
The refinery also pointed to insufficient supply from domestic upstream producers, despite provisions in the Petroleum Industry Act (PIA), as another factor forcing it to rely on imported crude bought at higher premiums.
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Operating in a deregulated market as a private enterprise, the refinery said its pricing decisions are guided by prevailing market conditions to ensure the sustainability of its operations.
It warned that selling petrol below production cost would make it difficult to secure crude supplies, maintain operations and guarantee steady fuel availability in the country.
Nonetheless, the company maintained that large-scale local refining remains essential for reducing Nigeria’s exposure to global supply shocks, easing pressure on FX demand and preventing severe fuel shortages during periods of international market disruption.
Dangote Refinery reiterated its commitment to transparency, efficiency and long-term energy security, assuring Nigerians that it remains focused on sustaining stable fuel supply despite the volatility in the global oil market.
