Petrol Prices Set to Cross ₦900 as Dangote Refinery Hikes Ex-Depot Rate Amid Crude Shortage
Dangote raises petrol price to ₦880 despite global oil slump, sparking fresh concerns.
Import reliance and forex woes push pump costs higher, may exceed ₦900 in remote areas.
Despite a recent dip in global oil prices, the Dangote Petroleum Refinery has raised its ex-depot price for Premium Motor Spirit (PMS), commonly referred to as petrol, from ₦825 to ₦880 per liter. This ₦55 hike, which took effect on Friday, is expected to push pump prices beyond ₦900 per liter in remote and transportation-challenged regions of Nigeria.
The timing of this increase comes as international crude benchmarks posted significant declines. Brent crude slumped by more than 3 percent to $76.47 per barrel, while WTI and Murban crude dropped to $74.93 and $76.97 respectively. Yet, local fuel pricing continues to defy this downward trend due to unique domestic challenges.
One of the central issues influencing this price surge is Nigeria’s ongoing struggle with crude oil supply. According to Aliko Dangote, President of the Dangote Group, the refinery has been forced to seek alternative sources of crude from overseas, particularly the United States, because Nigeria is currently unable to meet its local supply commitments.
This development contrasts sharply with the Federal Government’s naira-for-crude initiative, which was introduced to prioritize the domestic supply of crude to local refineries. Despite the policy, Dangote’s refinery has had to increasingly depend on imports to sustain operations, citing inadequate local allocations and logistical setbacks.
Between April and July 2025, the refinery is scheduled to import approximately 17.65 million barrels of crude oil, with 3.65 million barrels already received. This reliance on imported feedstock is a key reason for the price adjustment, as international sourcing comes with added logistical and foreign exchange burdens.
Additionally, Nigeria’s highly volatile forex environment continues to impact refinery operations and downstream pricing. Exchange rate fluctuations and inflationary pressures have further complicated the cost of importing crude and refining it locally, despite being processed within Nigerian territory.
The consequences of this price hike are expected to be far-reaching, particularly for consumers in regions far from major distribution hubs. Fuel marketers are anticipating a sharp rise in transportation costs, storage fees, and logistics expenses, all of which will likely be passed on to end users.
Industry analysts have warned that unless there is a stable and reliable crude supply mechanism within the country, ex-depot and pump prices will remain vulnerable to both local inefficiencies and global market dynamics. The persistent mismatch between local refining capacity and crude availability undermines the gains from having a mega-refinery on Nigerian soil.
Meanwhile, fuel marketers are still seeking detailed clarification from Dangote Refinery on its long-term distribution strategy across Nigeria. As the refinery scales up operations, stakeholders are urging more transparent and efficient logistics planning to reduce supply bottlenecks and curb arbitrary price hikes in retail markets.
The latest increase adds to growing public concern over the affordability of fuel, especially in an economy already grappling with high inflation and a weakening currency. If pump prices cross the ₦900 threshold in parts of the country, it could ignite further economic strain for households and businesses, especially in sectors heavily dependent on transportation and logistics.
While international oil prices may be on a decline, Nigeria’s internal challenges, ranging from crude supply shortages to foreign exchange instability, continue to drive up domestic petrol costs. Until these systemic issues are resolved, consumers are likely to keep facing sharp price adjustments at the pump.
