The Dangote Petroleum Refinery has clarified that the pricing of its petroleum products is not directly tied to daily fluctuations in international crude oil prices, explaining that its pricing decisions are based on actual production costs and crude inventories rather than spot market quotations.
Naijaonpoint reports that the clarification was contained in a statement issued by the refinery on Thursday, amid agitations by Nigerians over recent reductions in global petroleum product prices that have not been reflected in the country’s petroleum pricing structure.
The company reaffirmed its commitment to ensuring Nigerians benefit from favourable market developments through sustainable pricing.
It said, “Dangote Petroleum Refinery & Petrochemicals remains committed to ensuring that Nigerians benefit from favourable market developments through fair, responsible and sustainable pricing of petroleum products.”
According to the refinery, it has reduced the ex-depot price of Premium Motor Spirit by ₦200 per litre, Automotive Gas Oil by ₦300 per litre and Jet A1 aviation fuel by ₦520 per litre since May 30, 2026, despite processing crude oil purchased when international prices were significantly higher than current levels.
“These reductions demonstrate our commitment to passing on cost efficiencies to consumers while maintaining the operational and financial sustainability of domestic refining,” the statement added.
The refinery explained that the prices of its products do not automatically rise or fall in line with movements in the global crude oil market because crude is procured well ahead of refining.
“It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations. Crude oil is procured weeks, and in some cases months, before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices,” it stated.
According to the company, the petroleum products currently being supplied are being refined from crude inventories acquired at much higher prices than current market levels.
It disclosed that the average landed cost of crude processed by the refinery was approximately $124.80 per barrel in May and $95.25 per barrel in June, compared with the current international benchmark of about $71.01 per barrel.
The company further clarified that it does not purchase crude at the benchmark ICE Brent price widely reported in the media.
“Furthermore, refinery feedstock is not purchased at the headline ICE Brent price commonly reported in the media. Our crude is acquired on a Dated Brent plus market premium, freight and logistics cost basis, resulting in actual landed costs that differ materially from benchmark quotations,” the statement read.
The refinery also said it absorbed a significant portion of the increase in crude costs instead of immediately transferring the burden to consumers.
“Notwithstanding these elevated feedstock costs, Dangote Petroleum Refinery did not immediately transfer the full impact of rising crude prices to the Nigerian market. Instead, the refinery absorbed a substantial portion of the increase in order to support market stability, reduce inflationary pressures and shield consumers from the extreme volatility witnessed in global energy markets,” it said.
It added that petroleum product prices in Nigeria remain lower than those in neighbouring countries after accounting for taxes.
The company said it had begun a phased reduction in prices as cheaper crude cargoes entered its production cycle.
“As lower cost crude cargoes progressively enter our production cycle, we have commenced a phased reduction in product prices.
“Today’s N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS. This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short term fluctuations in international oil markets,” Dangote Refinery asserted.
The refinery also highlighted the role of domestic refining in ensuring energy security and reducing dependence on imported petroleum products.
“Nigeria today benefits from the stabilising role of domestic refining capacity. The Dangote Petroleum Refinery currently supplies volumes sufficient to meet national demand, helping to strengthen energy security, eliminate dependence on imports, conserve foreign exchange and provide greater price stability for consumers and businesses,” it added.
It expressed optimism that fuel prices would continue to moderate as procurement costs decline.
“As procurement costs continue to decline and lower priced inventories replace higher cost crude stocks, Nigerians can expect further price moderation, provided international market conditions remain favourable,” the statement concluded.
