Nigeria’s largest refinery has pledged to prioritise the domestic fuel market in a bid to prevent shortages and cushion consumers from the effects of rising global oil prices linked to tensions in the Middle East.
The Dangote Refinery made the commitment on Monday as energy markets reacted to the escalating conflict involving Iran, Israel and the United States, which has disrupted global supply chains and pushed crude prices above $100 per barrel.
Domestic Market to Remain a Priority
The refinery, owned by African billionaire Aliko Dangote, said it would continue prioritising Nigeria’s fuel needs to maintain supply stability in the country.
Speaking at a press conference in Lagos, Managing Director David Bird said the refinery is committed to ensuring Nigeria maintains adequate fuel supply despite international market volatility.
“Nigeria will continue to enjoy supply security,” Bird said.
However, he cautioned that this assurance depends on the refinery’s ability to access domestic crude oil with support from the government and the Nigerian National Petroleum Company (NNPC).
“Provided we continue to get access to Nigerian crude with the support of the Nigerian government and NNPC albeit at internationally benchmarked prices we will continue to process that oil and serve the domestic market with priority,” he added.
Refinery Capacity and Role in Nigeria’s Energy Market
The Dangote Refinery, which began operations in 2024, has a processing capacity of approximately 650,000 barrels of crude oil per day, making it the largest refinery in Africa.
Before its commissioning, Nigeria despite being Africa’s leading crude oil producer relied heavily on fuel imports to meet domestic demand, often experiencing recurring fuel shortages.
The refinery has since played a critical role in stabilising the country’s fuel supply and reducing reliance on imported petroleum products.
Rising Fuel Prices Across Nigeria
Despite the refinery’s efforts, fuel prices have risen sharply in recent days as global oil markets react to geopolitical tensions.
Petrol prices in Lagos have increased from about 830 naira per litre to approximately 1,050 naira per litre within a week a rise of nearly 20 percent.
The latest surge marks a record high in a country where petrol sold for around 195 naira per litre at the beginning of 2023.
Global Market Pressures
Bird warned that additional price increases cannot be ruled out because the refinery operates within the global commodity market.
He explained that rising crude oil prices, higher transport costs, and increasing insurance premiums linked to geopolitical risks have significantly increased operating expenses.
“As a private enterprise, we are fully exposed to the international commodity market,” he said.
Role of Government in Energy Pricing
Bird emphasised that any effort to stabilise fuel prices ultimately lies with government policy decisions.
“That is the role of government if they want to intervene in the economy when it comes to the cost of energy,” he noted.
In 2023, Bola Tinubu, president of Nigeria, removed long-standing fuel subsidies that had previously kept petrol prices artificially low. The move was intended to reduce government spending but has also contributed to higher pump prices for consumers.
With global oil markets remaining volatile, analysts say Nigeria’s energy sector will continue to face pressure as geopolitical developments influence crude prices and domestic fuel costs.
