The Managing Director and Chief Executive Officer of Dangote Petroleum Refinery, David Bird, says petrol prices may remain high despite the refinery operating at full capacity because it buys crude oil at international market rates.
This is as the war in the Middle East between America, Israel and Iran created tensions that led to rise in crude prices. Sometimes trading at $110 from $64 less than two weeks ago.
Speaking during a media briefing on Monday, Bird explained that the refinery is fully exposed to global commodity markets. He noted that even under the government’s crude-for-naira initiative, the refinery still purchases Nigerian crude from the government at international benchmark prices.
According to him, the refinery also pays global freight and insurance costs to transport crude from export terminals to the facility, adding to overall production expenses.
Bird disclosed that Nigerian crude accounts for about 30–35 per cent of the refinery’s total feedstock, while the remaining volume is sourced from the international market in US dollars. He said these supplies often pass through several traders before reaching the refinery, increasing the cost of procurement.
He added that the refinery processes a range of crude grades, including West Texas Intermediate and other blends from South America, Central America and West Africa.
While acknowledging the financial strain on consumers, Bird said the refinery is working to minimise costs across its operations.
He also highlighted the volatility of the global oil market, noting that Brent crude prices recently surged from the mid-$60 range to about $118 per barrel, while tanker freight costs rose sharply from roughly $800,000 to about $3.5 million per shipment.
Despite these challenges, Bird said local refining has strengthened Nigeria’s energy security, helping the country avoid fuel shortages and long queues during periods of global supply disruptions.
The refinery, he said, is currently operating at its nameplate capacity of about 650,000 barrels per day, with the potential to increase output to around 700,000 barrels per day to meet domestic fuel demand.