With International Refineries Down, Dangote Refinery Turns into Nigeria’s Vitality Lifeline

Dangote Petroleum Refinery & Petrochemicals reassures Nigerians of its unwavering dedication to serving as a stabilising power amid current shocks within the worldwide oil market.

The battle within the Center East has led to the shutdown of some refineries and reduce in refinery manufacturing the world over. That is resulting in a worldwide shortage of petroleum merchandise. China has banned export of gasoline and diesel. The Dangote Refinery will be certain that Nigeria is insulated from these provide shocks by prioritising provide to the home market. This is likely one of the many advantages of home refining

The battle has pushed world crude and freight costs sharply increased, with benchmark Brent costs rising by about 26% inside a brief interval to above $84.0 per barrel. In response, the refinery applied a measured adjustment of N100 per litre in its ex-depot value of Premium Motor Spirit, representing a rise of about 12%. The refinery has absorbed 20% of the fee escalation, for now, to cushion the home market. That is regardless of persevering with to supply crude at prevailing worldwide market costs, whether or not bought domestically or from international suppliers.

It’s value noting that Nigerian crude oil is dearer than the Brent benchmark value by $3 to $6 per barrel. After including freight of $3.50 per barrel, crude oil can be touchdown in our tanks between $88 and $91 per barrel. For context, crude oil was touchdown our tanks at about $68 per barrel when our ex-depot value was N774/litre.

Moreover, whereas we obtain about 5 cargoes a month from NNPC which we pay for in Naira, these cargoes are priced at worldwide market costs + Premium and fall in need of the 13 cargoes which we require to help gross sales into Nigeria. We due to this fact, find yourself procuring international alternate at open market charges to pay for crude cargoes bought from native and worldwide merchants.

The excessive crude price is compounded by the truth that Nigeria upstream producers have failed to produce crude oil to the refinery as required below the PIA, forcing us to supply a considerable portion by worldwide merchants who cost a further premium.

As a non-public enterprise working in a deregulated setting, Dangote Petroleum Refinery has remained responsive and has made vital sacrifices by aligning pricing with market realities to make sure sustainability, notably because it sources all its crude at prevailing worldwide market costs, whether or not domestically or from international suppliers. Promoting under price would undermine its capability to obtain crude, maintain manufacturing and assure uninterrupted provide to Nigerians.

Regardless of these pressures, native refining at this scale continues to cut back publicity to worldwide provide disruptions, reasonable international alternate demand and defend the nation from extreme shortages during times of world instability.

The refinery can be accelerating deployment of Compressed Pure Gasoline-powered vans to cushion the affect of world shocks, improve nationwide distribution effectivity, scale back logistics prices and enhance supply timelines throughout the downstream sector. The rollout is scheduled to begin this month.

We stay dedicated to transparency, operational excellence and the long-term goal of securing sustainable power safety and stability for Nigeria at an inexpensive price.